Nomura has reiterated its ‘Buy’ rating on Ramco Cements with a target price of ₹1,060, stating that the company’s Q4FY25 performance was weighed down by its higher exposure to weak southern markets, resulting in a significant earnings miss versus industry peers.
Ramco Cements reported a 74.5% drop in Q4 net profit to ₹31 crore, with revenue declining 10.5% YoY to ₹2,392 crore. EBITDA fell to ₹320.8 crore, down 23% YoY, missing Nomura’s estimate by 26%. The company’s blended EBITDA per tonne came in at ₹607, down 5% sequentially and 23% below estimates, marking the lowest within its coverage universe.
Nomura noted that Ramco was the only major cement company under its coverage to report a YoY decline in volumes, indicating a loss in market traction amidst strong competition in the southern region.
However, the brokerage acknowledged that net debt fell by ₹320 crore, improving the net debt-to-EBITDA ratio to 3.5x from 3.6x in Q3FY25. While the operational performance was underwhelming in Q4, Nomura maintains a constructive long-term view on Ramco Cements, especially as regional prices begin to firm up and the company’s capacity additions start contributing meaningfully in FY26.
Disclaimer: This article is based on the brokerage report by Nomura. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
