Stock Snapshot
Price Performance
Recommendation Rationale
Favorable growth outlook supported by capacity expansion and strategic asset management.
Basis of our Recommendation
Ramco Cements is poised for growth driven by significant capacity expansion and strategic asset monetization, targeting ~31 MTPA by FY27. Despite facing margin pressures due to structural cost increases and subdued growth sentiment, management remains optimistic about demand from government infrastructure and housing projects. The company's focus on optimizing its power and fuel mix may help mitigate some cost challenges.
Why We Like This Stock
- Significant capacity expansion targeting ~31 MTPA by FY27
- Optimized power and fuel mix expected to improve margins
- Strategic asset monetization efforts to support deleveraging
Things To Watch Out For
- Structural raw material cost increases impacting margins
- Subdued growth sentiment leading to cautious outlook
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 9,376 | 8,518 | 9,029 | 9,601 | 10,524 |
| Profit Before Tax (Cr.) | 538 | 119 | 318 | 384 | 497 |
| PBT Margin | 5.7% | 1.4% | 3.5% | 4.0% | 4.7% |
| Net Profit (Cr.) | 457 | 153 | 391 | 361 | 467 |
| EPS | 19.5 | 6.6 | 16.6 | 15.3 | 19.8 |
Company Overview
Show Company Profile
The Ramco Cements Limited manufactures and sells cement and construction Chemicals in India. The company offers blended cements and OPC products; ready mix concrete; and construction chemical products, including waterproofing compound, anchoring grout, micro concrete, bonding agent, plaster and putty, block fix, Tilefix, and Tilegrout. It also provides construction solutions for housing projects, apartments/institutions, public infrastructure projects, and industrial projects; and technical assistance and after-sales support to builders and customers. In addition, the company is involved in the generation and sale of electricity from windmills and thermal power plants; manpower supply; transportation of goods by road; and information technology services. It also sells its products to the Maldives and Myanmar through direct and merchant exports. The company was formerly known as Madras Cements Ltd. and changed its name to The Ramco Cements Limited in July 2013. The Ramco Cements Limited was incorporated in 1957 and is headquartered in Chennai, India.