Comments
Reliance Securities
Ramco Cements (Buy)
CMP: ₹727.15
Target: ₹850
The Ramco Cements (RCL), formerly Madras Cements, manufactures cement, ready-mix concrete and dry mortar products. The company operates in two segments, namely, cement and power generation from windmills.
Ramco Cements gained about 2 per cent on Tuesday’s sell-off markets despite subdued operational performance.
While operational performance was dismal led by cost pressure, a substantial decline in finance costs and impressive sales volume were key positives for 3QFY18.
RCL’s strategy to grow in outside Southern markets started paying-off and commissioning of 3 mnT new satellite capacity in next 18 months will furthers aid RCL to improve volumes and profitability.
Moreover, visible change in fuel-mix and 12MW CPP will improve its operating synergy further.
We envisage improved operating efficiency with no meaningful capex would lead to healthy free cash flow (FCF) generation to the tune of ₹2,200 crore through FY18E-FY20E.
We reiterate our fundamental ‘buy’ rating on the stock with target price of ₹ 850.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.