In a recent development, Ramco Cements witnessed a 1% increase in its share price on October 3rd, following ICICI Securities’ decision to re-initiate coverage on the stock. ICICI Securities, a renowned domestic brokerage, has bestowed a ‘buy’ rating upon the company, along with a target price of Rs 1,051 per share.
ICICI Securities stated, “Having consistently demonstrated robust volume growth over the past six quarters, with an average YoY increase of more than 30%, Ramco Cements appears well-positioned to capitalize on the improving price sentiment in South India.”
The brokerage continued, “Considering the foreseeable sustained volume growth, bolstered by its recent acquisition of limestone mines in Andhra Pradesh, as well as the projected improvement in RoE (expected to rise from approximately 5% in FY23 to around 13% in FY26E), we have evaluated The Ramco Cements at 13x Sep’25E EV/EBITDA.”
Furthermore, Geojit Financial Service has also bestowed a ‘buy’ rating upon the cement manufacturer, setting a target price of Rs 1,034.
Geojit Financial Service expressed, “The Ramco Cements’ capacity expansion initiatives, combined with the Indian government’s strong emphasis on infrastructure and housing development, are expected to boost future volumes. Additionally, a decline in input costs and a focus on deleveraging post FY24 will likely enhance its valuation. The company has outlined a robust volume growth target of approximately 20% for FY24, and we anticipate revenue to grow at a CAGR of 12% over FY23-25E.”
As of 3 pm on the NSE, Ramco Cements was trading at Rs 919 per share, marking an increase of Rs 8.80 or 0.90 percent.
In its financial results for the April-June quarter, Ramco Cements reported a notable YoY increase of 26.30% in revenue from operations, reaching Rs 2,247 crore. However, the net profit for the quarter experienced a 32.11% YoY decline, amounting to Rs 74 crore. The operating profit margins contracted by 200 basis points compared to the previous year, settling at 15%.
Ramco Cements is primarily engaged in the manufacturing and sale of cement and related products.