JM Financial maintains Hold on The Ramco Cements, revises target price to Rs 1,000

JM Financial maintains Hold call on The Ramco Cements with a revised target price of Rs 1,000 (earlier Rs 960). The current market price of The Ramco Cements is Rs 1075.9. The time period given by the analyst is a year when The Ramco Cements price can reach the defined target. Ramco Cements, incorporated in 1957, is a Large Cap company with a market cap of Rs 25115.52 crore, operating in the Cement sector.

The Ramco Cements’ key products/revenue segments include Cement, Dry Mortar Mix, Scrap, Ready Mix Concrete, Power and Other Operating Revenue for the year ending 31-Mar-2024.

Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 2409.72 crore, up 20.83% from last quarter Total Income of Rs 1994.26 crore and down -10.48 % from last year same quarter Total Income of Rs 2691.84 crore. The company has reported net profit after tax of Rs 24.82 crore the in latest quarter. The company’s top management includes Mr.M F Farooqui, Mr.P R Venketrama Raja, Justice(Retd)Chitra Venkataraman, Mr.M S Krishnan, Mr.C K Ranganathan, Mr.Ajay Bhaskar Baliga, Mr.R Dinesh. Company has Ramakrishna Raja & Co. as its auditors. As on 31-03-2025, the company has a total of 24 crore shares outstanding.

Investment Rationale
Average cement prices have risen by Rs 30-35/bag in trade and Rs 60-70/bag in non-trade in the South from exit of Mar?25. The sustenance of prices should augur well for profitability in the coming quarter (>Rs 300/tn sequentially). According to JM Financial, the management expects overall cost increase of ~INR 100/tn from FY26 owing to implementation of Tamil Nadu Mineral Bearing Land Tax Act, 2024. It aims to increase current clinker capacity from 16mt to 19mt and cement capacity from 24mt to 30mt by FY26E; a majority of the addition is likely through de-bottlenecking at various locations at a minimal capex of USD 10-15/tn; It remains committed to the sale of INR 10bn of noncore assets (has realised Rs 4.6 billion so far) by Jul?25 as committed earlier to meet capex/ keep leverage in check; Targeting 2x-3x revenue growth (additional revenue stream) in the construction chemicals business (revenue of ~Rs 2.2billion in FY25) over the next couple years. Recent price hikes and ongoing deleveraging are near-term catalysts for stock performance. But a durable re-rating hinges on sustained profitability along with market share gains and controlled leverage. The brokerage maintains HOLD with Jun?26 target price of Rs 1,000 (post quarterly-rollover) based on 13x Jun?27 EV/EBITDA. Promoter/FII Holdings
Promoters held 42.56 per cent stake in the company as of 31-Mar-2025, while FIIs owned 7.29 per cent, DIIs 30.14 per cent.