Below is the View On Ramco Cements (TRCL): 2QFY19 Result: FIRST CUT by Binod Kumar Modi Reliance Securities.
Reported performance has broadly in-line with the expectations. However, slightly higher than expected sales volume and better realisation were key surprise. Debt amount has also improved mainly led by ongoing capex programme. We have a positive view on the stock and will come out with a detailed note post the discussion with the management soon.
* Ramco Cements (TRCL) has reported decent 2QFY19 performance, which is broadly in-line with our expectations. Reported EBITDA came in at Rs2.04bn slightly ahead of our expectations of Rs1.96bn. EBITDA/tonne stood at Rs830 (Rs818 was estimated) vs. Rs1,229 and Rs828 in 2QFY18 and 1QFY19, respectively.
* While cost overhang continue to persist with operating cost/tonne increasing by 6.7% YoY and 2.2% QoQ at Rs3,793, a sequential recovery of 1.9% in average NSR at Rs4,622 aided TRCL to witnessed better operational performance sequentially.
* Sales volume grew strongly by ~15% YoY 2.47mnT despite the impact from Kerala flood, where TRCL enjoys 22% market share.
* Input cost/tonne surged by 11% YoY and 2% QoQ to Rs1,707 mainly led by sharp increase in power & fuel cost/tonne (+35% YoY and +11% QoQ). However, freight cost/tonne declined sequentially by 2.5% at Rs1,095, which we believe is on account of low volume in Eastern markets due to monsoon.
* Net Profit stood at Rs1.14bn (-32% YoY and -8% QoQ) in-line with estimates.
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