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  • 26 Jul 2024
  • ICICI Securities

LOWER SALES REALIZATION IMPACTED THE OPERATIONAL PERFORMANCE

RAMCOCEM - 999 Change: 10.85 (1.10 %)

News: Revenue decreased by 6.8% YoY (-21.8% QoQ) to Rs 2093.6 crores led by volume growth of 1.3% YoY (-20.6% QoQ) to 4.4 million tonnes. However, realizations dipped by -8.1% YoY (-1.5% QoQ) to Rs 4804/tonne. Lower sales realisation limited the revenue growth. EBITDA stands at Rs 320.2 crores (-6.8% YoY, -23.6% QoQ). EBITDA/ton decreased by 8% YoY (-3.7% QoQ) to Rs 735/ton dragged by lower realization which also negated the positive impact of lower P&F. PAT decreased by 51% YoY (-71.4% QoQ) to Rs 36.6 crores, led by higher interest & depreciation expense (due to commissioning of Odisha line-II & Jayanthipuram).

Views: Volume & realisation were below estimates. However, EBITDA/ton was largely in line with the expectations, mainly on account of lower than expected total cost/ton. Going forward, we expect company's volume growth to pick up, led by demand improvement in southern & eastern region markets and improvement in utilisation level of existing capacity. Moreover, company is in the process of increasing its capacity to 30 mtpa by FY 26E (from 24 million tonnes at present). Company is also in the process of monetizing its non-core assets worth Rs 1000 crores in the next 12 months which will help in funding planned capex. With focus on operational efficiencies & positive operating leverage, EBITDA/ton is also expected to improve.

Impact: Negative