Ramco Cement shares record 52-week high on strong Q4 results; check details

Ramco Cement share price touched 52-week high and gained over 7% on Friday's trading session following robust Q4FY23 earnings. Ramco Cement shares opened trading at intraday lows of ₹793.30 but eventually hit an intraday high of ₹841.55 on the BSE.

As a result of rises in volume, the company said on Thursday that its consolidated net profit for the fourth quarter ended March 2023 increased by 27.33% to ₹150.60 crore.

The Ramco Cements in a regulatory filing stated that the company generated a net profit of ₹118.27 crore for the January-March quarter of the previous fiscal.

Sales increased by 50.71% to ₹2,558.68 crore during the reviewed quarter compared to ₹1,697.66 crore during the same time the year prior.

The overall costs incurred by the company increased 52.51% to ₹2,378.95 crore in Q4 FY23 from ₹1,559.77 crore the previous quarter.

"During Q4 FY23, the sale of cement and dry mortar products is 4.70 million tons, compared to 3.23 million tons in the Q4 FY22 with an impressive volume growth of 46 per cent," said the company.

The company's total expenses rose 52.51% to ₹2,378.95 crore in Q4 FY23 from ₹1,559.77 crore a year ago, while its total income increased by 50% to ₹2,583.57 crore.

The company's net profit for the fiscal year that ended in March 2023 decreased 64.31% to ₹314.52 crore. In the same time last year, it had reported a net profit of Rs. 881.48 crore.

"While the average net realisable price of cement was flat during the year, the elevated prices of pet coke/coal dented the margins. The cement demand in the medium term is expected to be resilient in view of Government's focus on infra spend, upcoming elections and forecast of normal monsoon for 2023.The company expects an improvement in margins from Q2 of FY24 onwards," the company said.

According to ICICI Direct Research, the cost, insurance, and freight (CIF) spot pet coke prices are now trending at lower levels at US$125 (vs. US$178 in February 2023). The benefit of the same is expected to flow from H1FY24E.

On the balance sheet front, the company generated operating cash flow (OCF) of ₹1400 crore and incurred capex of ₹1765 crore. Owing to healthy profitability, company has managed to reduce net debt by ₹205 crore (on a QoQ) basis to ₹4351 crore. With capex intensity to reduce going forward (FY24 guidance: 892 ₹crore) and company generating higher OCF, the brokerage expect b/s deleveraging to pickup pace in FY24E.

On the technical front, the stock price rose 18.3% and underperformed its sector by 16.2% in the past year.

"The prices have broken above the key hurdle of 800 and we are seeing a strong follow up buying backed with volumes. Expect this move to continue towards 900 with 800 as immediate support," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.

Cement stock hits 52-week high ahead of Q4 results today. Do you own?

Cement stock hits 52-week high ahead of Q4 results today. Do you own?.