ramco cements share value: The Ramco Cements’ 98% slide in Q2 revenue sparks goal cuts

New Delhi: kicked off Thursday session’s below extreme promoting strain because the inventory plunged 10% following its flop present in September 2022 quarter, leaving brokerage corporations in a repair over the inventory’s outlook.

The cement and cement merchandise participant reported a 98% year-on-year (YoY) decline in web revenue to Rs 11 crore for the quarter that ended September 30, 2022. It reported a bottomline of Rs 515.84 crore in the identical interval the earlier yr.

Its EBITDA declined 52% to Rs 193 crore from Rs 402 crore, primarily as a result of a pointy enhance in gasoline costs and weak cement costs. The corporate’s income rose by 19% YoY to Rs 1,793 crore throughout the quarter.

Jefferies maintained an underperform score on

with a goal value of Rs 615. The worldwide funding financial institution prefers over different mid-tier friends earlier, it mentioned.

The worldwide brokerage agency mentioned drag from the digital danger enterprise is more likely to proceed. “A troublesome macro setting may additional harm the corporate. Valuations are at about 21x 1-year; ahead consensus EPS is excessive,” it added.

Following the announcement of earnings, shares of The Ramco Cements plunged as a lot as 10% on Thursday earlier than buying and selling at Rs 643 at 10.30 am. The inventory settled at Rs 704.10 within the earlier session.

For the reason that general gasoline costs peaked within the ongoing monetary yr, the ability & gasoline price per tonne of cement for the July-September interval sharply elevated to Rs 2,013 from Rs 1,057 within the year-ago quarter.

Sure Securities consider that The Ramco Cements reported mixed-bag efficiency. Regardless of the seasonal weak spot, it posted 10% higher income than anticipated, as a result of sturdy quantity development. Nevertheless, escalated prices dented the EBITDA, it mentioned.

“We count on quantity to extend with enhancing utilisation of newly-commissioned capacities. Now we have elevated our income estimate for the following two fiscals. We consider margins to stay below strain as a result of power value volatility coupled with excessive publicity to the overcrowded south and unstable demand,” Sure Securities added.

The brokerage has a purchase score on the inventory with a revised goal value of Rs 956 earlier from Rs 1,135. Even the revised goal value suggests a 35% rally within the counter.

Ramco Cements proposed to extend the grinding capability of the Haridaspur plant at Odisha by 0.9 mtpa. Since different infrastructures are already in place, it would spend Rs 130 crore on the growth, which can double its capability.

consider capex steering is a bit aggressive, given the present leverage place and the working money movement it might generate over the following two years. Factoring in higher-than-expected gasoline prices, it has trimmed its estimates.

The home brokerage has additionally diminished its goal value for the inventory to Rs 785 per share from Rs 830 earlier however maintained an ‘add’ score. It has cited decrease demand or value and better enter price as the important thing dangers to the corporate.

(Disclaimer: Suggestions, strategies, views, and opinions given by the consultants are their very own. These don’t symbolize the views of Financial Occasions)