Published on 23/05/2018 4:52:09 PM | Source: Reliance Securities Ltd

Ramco Cements: 4QFY18 Result - Reliance Sec

Below is the View On the 4QFY18 Result: FIRST CUT for ​Ramco Cements by Binod Kumar Modi Sr. Research Analyst Reliance Securities

Rsec View:

We continue to believe that RCL is likely to gain further traction ahead led by; a) cost leadership, b) consistent de-leveraging of balance sheet, c) strong brand equity, d) likely improvement in its utilizations further led by demand revival in TN , and e) better than industry’s return ration. However, current valuations appear to be at pricey. We will come out with a detailed note soon.

* Ramco Cements (RCL) has reported 12% YoY (+18% QoQ) growth in EBITDA in 4QFY18 to Rs2.68bn, which is ahead of our estimate of Rs2.25bn. A higher than estimated sales volume is the key reason of higher EBITDA.

* EBITDA/tonne came in at Rs979 v/s Rs1,052 and Rs996 in 4QFY17 and 3QFY18, respectively.

* Operating cost/tonne stood at Rs3,586 (+5.5% YoY and -0.7% QoQ). Sequential decline is mainly on account of higher utilisation led savings. Power & fuel cost and freight cost stood at Rs805 (+20% YoY and -2% QoQ) and Rs1063 (+17.9% YoY and +6.9% QoQ). Further, average realisation/tonne stood at Rs4,565 (+2.6% YoY and -0.9% QoQ).

* Sales volume improved substantially by 20% YoY and 21% QoQ to 2.74mnT mainly on account of higher contribution from Eastern markets and gradual revival in TN markets.

* Finance costs declined further to Rs105mn (-48% YoY and -35% QoQ). However, higher tax provisions (adjusted of prior periods) led to PAT decline of 19% YoY and 12% QoQ to Rs1.09bn as against our estimate of Rs1.19bn.

For More Reliance Securities Ltd disclaimer at SEBI registration No. INH000002384

Above views are of the author and not of the website kindly read disclaimer