India's Ramco Cements posts adjusted profit slump as low prices bite

India Cements

06/02/2025 13:19

Feb 6 (Reuters) - India's Ramco Cements  TRCE.NS  on Thursday posted a 97% slump in third-quarter adjusted
profit, hurt by a drop in prices of the key construction material. 
    Profit before exceptional items and tax for the company's cement business fell to 43.5 million rupees ($496,774)
during the October-to-December period from 1.35 billion rupees a year earlier.
    The company reported a one-time gain of 3.29 billion rupees from the sale of its surplus land and investments, it
said. 
    Revenue from the cement business fell 6% on-year to 19.77 billion rupees, below analysts' average expectation of
20.19 billion rupees, according to data compiled by LSEG. 
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3OX1BI
    
    KEY CONTEXT
    Cement prices have been falling for most of last year, but showed signs of recovery in the reported quarter. Still,
at the end of the December-quarter - a seasonally weak one as the pace of construction activity slackens - the average
pan-India cement price was 11% lower on-year. 
    In south India, Ramco's key market, the price drop was even higher at 14%, it said, as increased dealmaking in the
region spurred competition. 
    Cement makers have reported a mixed set of earnings for the December quarter. 
    Market leader UltraTech  ULTC.NS  and its closest rivals, the Adani group-owned Ambuja  ABUJ.NS  and ACC  ACC.NS ,
have benefitted as their acquisition sprees have helped bolster volumes.
    However, smaller peers such as Shree Cement  SHCM.NS  and Dalmia Bharat  DALB.NS  have been hit by low prices.
    
    PEER COMPARISON (WITH OTHER SOUTH REGION-FOCUSSED CEMENT MAKERS)
    
                                   Valuation (next 12     Estimates (next 12    Analysts' sentiment              
                                   months)                months)                                                
                      RIC          PE     EV/EBITDA       Revenue     Profit    Mean     No. of   Stock to       Div
                                                          growth(%)   growth(%  rating*  analyst  price          yield
                                                                      )                  s        target**       (%)
 Ramco Cements         TRCE.NS     37.82  13.89           10.09       54.48     Hold     21       0.99           0.28
 Dalmia Bharat         DALB.NS     36.30  11.84           8.83        41.50     Hold     28       0.99           0.48
 India Cements         ICMN.NS     -      28.81           12.34       -         Sell     3        1.08           -
 Orient Cement         ORCE.NS     31.63  15.06           7.31        39.90     Sell     5        1.41           0.66
 
    
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
    
    OCTOBER-DECEMBER STOCK PERFORMANCE 
 
     
-- All data from LSEG
-- $1 = 87.5650 Indian rupees
   

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TRCE Q3    https://tmsnrt.rs/4hI6gHM
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 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))