Mar'25 View on The Ramco Cements Ltd

Ramco Cements Ltd is engaged in manufacture of cement, Ready Mix Concrete (RMC) and Dry mortar products. It primarily caters to the domestic market of India. After making a high near 1,060 the stock has just crossed 20EMA and facing resistance near 50,100 and 200EMA and looks weak and fall till 600 due to the following negative inputs. • Combination of higher freight costs ((-)0.6% yoy, +4.7% qoq) and higher other costs ((-)20% yoy, +2.5% qoq), led to lower than estimate EBITDA. • The realization declined by 0.3% qoq ((-)14% yoy). • TRCL’s Q3FY25 EBITDA was below our estimates, mainly due to higher costs. • Co. saw a sequential decline in operating margins in contrast to most other companies in our coverage. • We expect the supply/margin pressure to persist in the southern market in the medium term. • We expect TRCL’s volumes growth to be constrained by capacity in FY2025/26E • We estimate EBITDA of Rs726/815/ton in FY2025E/26E. • Co. trades at an expensive 15X EV/EBITDA on an FY2026E basis. Maintain SELL.