Add The Ramco Cements, target price Rs 760: HDFC Securities

HDFC Securities has add call on The Ramco Cements with a target price of Rs 760. The current market price of The Ramco Cements is Rs 731.55. Time period given by analyst is one year when The Ramco Cements Ltd. price can reach defined target.

The Ramco Cements Ltd., incorporated in the year 1957, is a Large Cap company (having a market cap of Rs 16879.55 Crore) operating in Cement sector.

The Ramco Cements Ltd. key Products/Revenue Segments include Cement, Dry Mortar Mix, Power, Scrap, Ready Mix Concrete and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 1785.64 Crore, up 3.65 % from last quarter Total Income of Rs 1722.68 Crore and up 44.00 % from last year same quarter Total Income of Rs 1239.99 Crore. Company reported net profit after tax of Rs 113.27 Crore in latest quarter.

Investment Rationale
The brokerage maintains ADD on The Ramco Cements (TRCL), with a revised target price of INR 760/share (13x Mar-24E EBITDA). It continues to like the company for its strong retail presence in the south and growth oriented strategy. TRCL delivered robust volume YoY in Q1FY23 on strong traction in south and ramp- up in east. However, subdued pricing and soaring fuel prices drove down unitary EBITDA by 47/7% YoY/QoQ to INR 867 per MT. TRCL’s Kurnool project is expected to be operational in Q2FY23 and Capex will slow down thereafter.

Promoter/FII Holdings
Promoters held 42.33 per cent stake in the company as of 31-Mar-2022, while FIIs owned 7.63 per cent, DIIs 32.63 per cent.