Ramco Cements - Q4FY20 First Cut - ICICI Securities

(CMP: Rs. 645; MCap: Rs. 15,195 crore)

Ramco Cements Q4FY20 numbers broadly remained in line with our estimates at operational levels with better net profitability. At operational level, the numbers are better on the realisations and margins front, while volume remained lower compared to our estimates.

Q4FY20 Earnings Summary

- The company reported a 9.2% YoY drop in revenues to Rs. 1,394 crore (vs. I-direct estimates of Rs. 1,422 crore). This was mainly led by 11% fall in the sales volume during the quarter to 2.93MT (vs I-direct est: 3.10MT) as company's operation were impacted from mid-march due to imposition of lockdown. On the other hand, realisations remained better that increased by 2% YoY to Rs. 4754/tonne (vs. I-direct est: 4565/t)

- Total costs per tonne increased by 3.3% YoY to Rs. 3,798/t (vs. I-direct estimates of Rs. 3,712/t). The miss was led by higher other costs that were up by 29% on YoY basis due to higher spend towards advertisement and sales promotion due to new launches of premium varieties of cement and for brand promotion. On the other hand, all major cost heads like power, freight and raw materials were down by 2.7%, 2.2% and 4.9% YoY respectively

- With better realizations, company reported EBITDA margins of 20.1% vs our estimated EBITDA margin of 19.1% for the quarter. EBITDA/tonne came in at Rs. 956/tonne (down 2.6% YoY, up 33% QoQ) vs our estimated EBITDA/tonne of Rs. 876/tonne

- Company reported net profit of Rs. 145.7 crore (down 10.8% YoY, up 52.7% QoQ) vs our estimated net profit of Rs. 89.6 crore for the quarter

The Expansion of grinding unit near Vizag, AP from 0.95 MT to 2 MT was commissioned in March, 2020. New grinding unit in Haridaspur, Odisha with a capacity of 1MT is expected to be commissioned in August 2020. The new clinker capacity at Jayantipuram and new cement plant at Kornool is expected to get commissioned by Mar-21. The company has incurred total Rs. .1,920 crores towards total capex during the current year. The balance capex to be incurred shall be Rs.1,380 crores for its ongoing capacity expansion programme. We would shortly be coming out with a detailed report

Shares of The Ramco Cements Limited was last trading in BSE at Rs.644.7 as compared to the previous close of Rs. 621. The total number of shares traded during the day was 82274 in over 4743 trades.

The stock hit an intraday high of Rs. 659.5 and intraday low of 623.5. The net turnover during the day was Rs. 52925265.

Source : Equity Bulls

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