(Reuters) -India’s Ramco Cements reported first-quarter results below expectations on Thursday, as sales volumes took a hit from early monsoon rains.
Standalone revenues dipped 1% on-year, as rains-dented demand outweighed a pricing rebound in Ramco’s core southern markets. However, a 4.3% on-year decrease in costs helped profits to more than double. Still, on both counts, the company missed analysts’ average estimate compiled by LSEG.
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KEY CONTEXT
Cement volumes fell 7% on-year in the reported quarter, Ramco said in a statement, hurt by “weak demand” due to early monsoon rains in the southern state of Kerala. South India gives Chennai-based Ramco 80% of its volumes.
April-June is a seasonally weak quarter for cement makers as soaring summer temperatures and monsoon rains hinder construction activity and hit demand for the construction material.
Meanwhile, cement prices in the region has been under pressure from last year until April, when they sharply rebounded helping pan-India prices gain 2% year-on-year in the reported quarter, according to brokerage Ambit Capital.
Regional peer Dalmia Bharat’s consolidated profits in the reported quarter also jumped mainly on cost control measures as its revenues stagnated on-year.
PEER COMPARISON
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 43.58 15.98 13.19 156.62 Hold 24 1.14 0.17
Limited
UltraTech Cement 36.66 19.81 14.53 42.33 Buy 37 0.91 0.63
Ltd
Ambuja Cements 33.86 16.34 22.41 4.53 Buy 35 0.91 0.34
Dalmia Bharat Ltd 32.14 12.37 10.60 40.61 Hold 33 0.98
* 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
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.4490 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Rashmi Aich and Shailesh Kuber)
