The Ramco Cements Q1 Results:
Volume growth on a low base of last year coupled with stable realization boosted revenue.
The Ramco Cement reported a net profit of Rs. 109.23 crores, down by 36.37% YoY from Rs. 171.67 crores on account of high fuel prices and weak cement prices.
Ramco Cement’s revenue grew 44.1% YoY and 3.9% QoQ to Rs 17,79.4 crores. Cement sales stood at 3.31 MT for Q1FY23, a growth of 54.7% YoY and 3.8% QoQ. Volume growth on a low base of last year coupled with stable realization boosted revenue. The blended realization for the quarter was at Rs. 5,376/ton, declining by 4.5% YoY, though on a sequential basis realization saw a marginal rise of 1%. Share of premium products stands at 24% for Q1FY23. Sales Volume was lower in Q1FY22 on account of CoVID-related lockdowns. Cement sales increased by 55% YoY.
The total expenses increased 64.96% to Rs 1,630.59 crore in Q1 FY2022-23 from Rs 988.46 crore a year ago.
Variable Costs have gone up due to sharp fuel price increases. The cement price increase was insufficient to cover the fuel cost push. Effective tax rates were reduced due to the adoption of the new tax regime. Finance costs increased due to the commissioning of the clinker unit in JPM Line III.
Higher costs of power & fuel along with an increase in logistics costs dented the margin.
EBIDTA for Q1 of CY is Rs.308 crores as against Rs.370 crores during Q1 of PY with a de-growth of 17%, mainly due to a sharp increase in fuel price and weak cement prices. The industry could not pass on the full cost increase arising out of a sharp fuel price hike, to its customers. Pet coke and coal prices have increased. Consequently, power & fuel cost has increased by 553 / ton in Q1 YoY. Increase in diesel price by 11% YoY. EBITDA margin contracted by 1265 bps YoY/18 bps QoQ to 17%.
Profit before tax declined by 38% YoY to Rs. 155.05 crores from Rs. 251.53 crores.
The shares closed at Rs. 726.35, down by 0.87%.
The return on equity (ROE) is 14.7% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 20.5. The return on capital employed (ROCE) for the company is 9.51%. The price to book the value of Ramco Cements is 2.64. The EV/EBITDA is 16.7. The debt to equity ratio is 0.64.