Ramco Cements Q3 Results Below Estimates, Shares Fall 8%

The Ramco Cements Ltd.'s Q3 FY24 performance was below estimates, with lower sales volume and realizations. The company's net profit rose 39% to ₹93 crore, but it missed estimates, leading to an 8% fall in its shares. The results came after the close of the market hours, and the shares ended at ₹975.35, down by ₹19.90, or 2.00% on the BSE.

The company's sales volume was 6% lower than estimated, although it was up 10% year-on-year. Realization improved 4% quarter-on-quarter but was 1% below the estimate. The EBITDA grew 39% year-on-year to Rs 3.95 billion, while the operating profit margin was up 4.6 percentage points year-on-year to 18.8%.

The management guided a sales volume of 5 million tonnes in Q4 FY24, up approximately 7% year-on-year, and around 19-20 million tonnes in FY25, up 6-11% year-on-year. It also announced a brownfield expansion of 3.15 million tonnes clinker/1.5 million tonnes per annum cement capacity at a capex of Rs 12.5 billion. The company believes that its net debt, at Rs 50 billion, has peaked and that future expansion will predominantly be funded through internal accruals.

Motilal Oswal has cut its earnings per share estimate by 6% for FY24 while retaining its estimates for FY25/26. The company is valued at 12 times FY26E enterprise value/EBITDA, given its higher leverage. Motilal Oswal has reiterated a Neutral rating on the stock with a revised target price of Rs 970.

Source: NDTV Profit, Ramco Cements Q3 Results Review