Ramco Cements' margins contract sharply Q3FY22RAMCOCEM - 1019 Change: -3.30 (-0.32 %)
News: Ramco Cements' EBITDA margin declined 1472 bps YoY to 14.9% on elevated fuel cost. Absolute EBITDA & PAT declined 42% YoY and 59% YoY, respectively, though it improved sales volume lead to revenue growth of 15.3% YoY to Rs.1549.1 crore.
Views: While we had estimated margin contraction of 780 bps YoY, the deviation remained far higher mainly due to the company’s inability to pass on the cost pressure through price hikes during the quarter despite growth in volumes. Though fuel prices have settled down, we expect cost pressure to stay for a while till the time high cost fuel inventory gets fully absorbed.