Ramco Cements share price tanks after Q2 results. Should you buy?
- Ramco Cements share price: Immediate support for the cement stock is placed at ₹580 apiece levels, say stock market analysts
After announcement Q2FY23 results on Wednesday, Ramco Cements share price has been under sell-off stress since opening bell today. Ramco Cements share price today opened downside and went on to hit intraday low of ₹634.05 apiece, around 10 per cent lower from its Wednesday close price of ₹704.15 per share on NSE.
According to stock market experts, Ramco Cements has announced weak results and it has missed the estimates by huge gap. They said that the stock is expected to remain weak for short term and fresh buying can be done around ₹580 to ₹600 apiece levels. For safe investors, they advised buying above ₹680 apiece levels.
On Ramco Cements Q2 results, Motilal Oswal reports, "The Ramco Cements (TRCL)’s 2QFY23 performance missed our estimates on higher opex; though sales volume/realization beat our estimates. EBITDA was at ₹1.8b (against estimated ₹2.2b) while blended EBITDA/t was at ₹555 (against out estimate of ₹693). Net profit stood at ₹115m (against out estimate of ₹466m) in 2QFY23."
Maintaining neutral rating on the stock, Motilal Oswal added, "We have cut our FY23/FY24 EBITDA estimates by 6%/3% on higher costs. Profit estimates are being reduced by 18%/22% for FY23/FY24 on higher interest/depreciation costs. We maintain our Neutral rating, valuing the stock at 12.5x Sep’24E EV/EBITDA (v/s 14x Mar’24E earlier)."
Expecting weakness in Ramco Cements shares to continue, Sumeet Bagadia, Executive Director at Choice Broking said, "Ramco Cements share price is looking weak on chart pattern and it may go up to its support zone of ₹600 to ₹580 apiece levels. On the upper side, it is facing hurdle at ₹680. For those who hold the stock, stop loss at ₹580 is advisable and high risk investors can make fresh buying or accumulation at ₹580 to ₹600 support zone. However, for a safe investors, buying above ₹680 is advisable."
In Q2 results announced on Wednesday, Ramco Cements reported 98 per cent YoY drop in its consolidated profit. During the 02 of CV, the company has incurred Rs.504 crores towards capex, including for the above-mentioned ongoing capacity expansion programme. The net debt for the company as on 30-9-2022 is Rs. 4,741 Crores, out of which Rs.724 crores is short-term loan. The average cost of interest-bearing borrowings for the 02 of CV is increased to 6.42% from 5.47% in the Q2 of PY.
Blended EBIDTA per ton for the Q2 of CV is Rs.582/- as against Rs.1,484/- during Q2 of PY, which is one of the lowest in the last 8 years.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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