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JM Financial upgrades Ramco Cements to buy, target price Rs 935

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JM Financial has upgraded The Ramco Cements from hold to buy in the long term with a target price of Rs 935.

The stock gained half a percent to Rs 819 on Friday while the BSE Sensesex closed 12.81 points (0.03%) up at 41,945.37. Company FinancialsFor the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1282.35 crore, down -4.91 % from last quarter sales of Rs 1348.57 crore and up 12.36 % from last year same quarter sales of Rs 1141.26 crore.

The company has reported net profit after tax of Rs 170.10 crore in the latest quarter.

The company’s top management includes Justice(Retd)Chitra Venkataraman, Mr.M B N Rao, Mr.M F Farooqui, Mr.M M Venkatachalam, Mr.M S Krishnan, Mr.P R Venketrama Raja, Mr.R S Agarwal.

Company has SRSV - Associates as its auditors.

As on 31-12-2019, the company has a total of 235,576,780 shares outstanding.

Investment RationaleThe brokerage upgraded the stock citing the ramp up in new capacities which is likely to reduce company’s debt and improve return ratios materially.

While the new capacity will be setup at a cost of Rs 3,530 crore, fundamentals are set to improve due to reduction in exposure to South market to 85% from 87%, according to the brokerage.

Despite expansion, the net debt-to-EBITDA stands at comfortable level of 1.94x, said JM Financial.

The stock gained half a percent to Rs 819 on Friday.




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