Ramco Cements Q4 Review - Disappoints On Volume Growth: Prabhudas Lilladher
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Prabhudas Lilladher Report
The Ramco Cements Ltd. reported Ebitda below our estimates by 12% due to lower than expected volumes.
We remain negative on Southern region due to overcapacity and volatile demand pattern.
As demand outlook improves for the region, volume growth would come at the cost of weaker margins due to rise in competition for market share and low capacity utilisation.
The same has played out in FY18- FY20, FY13-FY15 and FY09-FY11.
Secondly, the company’s earnings profile would deteriorate with increasing exposure to low margin and volatile markets of Andhra Pradesh/Telangana and East regions.
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