In its research report dated October 5, 2023, Sharekhan has expressed a bullish outlook on The Ramco Cements and recommended a buy rating on the stock with a target price of Rs 1130.
The report highlights a significant increase in average cement prices in the South region, with prices rising by nearly Rs. 40 per bag in October. This translates to a 10% increase in cement prices compared to the average prices in the second quarter of FY2024. Furthermore, the report notes that international coal prices and domestic pet coke prices have softened after the second quarter of FY2024, providing operational profitability tailwinds to the company. These positive factors come amid a robust demand environment and the rise in cement prices.
The Ramco Cements is targeting a 20% year-on-year volume growth for FY2024 due to the strong demand environment. Additionally, the company’s Odisha grinding unit, with a capacity of 0.9 million tonnes per annum, is expected to be commissioned by the end of FY2024.
The report maintains a Buy rating on The Ramco Cements Limited, considering its strong earnings growth profile over the period from FY2023 to FY2026E. The target price of Rs 1130 reflects this positive outlook.
Investors are encouraged to consider this research report when evaluating the investment potential of The Ramco Cements. The report highlights the favorable market conditions and growth prospects for the company, driven by rising cement prices and robust demand.
