ICICI Direct: Ramco Cements’ Higher Realisations Ease Strain On Q1 Earnings

ICICI Direct Report

The Ramco Cements Ltd.’s Q1 FY21 numbers broadly remained above our estimates with better net profitability.

The company reported a 24.6% YoY drop in revenues to Rs 1,048 crore (versus our estimate of Rs 934 crore).

This was mainly led by 28.3% fall in sales volume during the quarter to 1.94 metric tonne (versus our estimate 1.8 metric tonne) as the company’s operation were impacted from mid-March due to imposition of lockdown.

On the other hand, realisations remained better, increasing 5% YoY to Rs 5,408/tonne (our estimate 5043/tonne). Total costs per tonne increased 6.6% YoY to Rs 4051/tonne.

This was led by higher raw material cost and employee expenses that were up 45%, 54.5%, YoY, respectively, on a per tonne basis due to lower sales volume absorption.

On the other hand, power and fuel cost declined sharply by 20.8% YoY due to fall in pet coke prices. With better realisations, Ebitda margins were at 25.1% versus our estimated Ebitda margin of 18.5% for the quarter.

Ebitda/tonne came in at Rs 1357/tonne (up 1.3% YoY, 41.9% QoQ) versus our estimated Ebitda/tonne of Rs 957/tonne.

Net profit was at Rs 110.9 crore (down 42.6% YoY, 23.9% QoQ) versus our estimated net profit of Rs 59.1 crore for the quarter.

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