The Ramco Cements LtdQ1 FY22Cement & Cement Products

The Ramco Cements Ltd

Q1 FY22 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→For FY2023, the company expects volume growth of minimum 12% to 15%.
→April-May growth has been very decent compared to last year; the company expects Q1 FY2023 volume to exceed 3 million tons.
→East market demand is expected to grow robustly, with minimum growth of 15% to 20% anticipated in the current year.
→The company plans to increase the share of premium products from 22% in FY2022 to 30% in FY2023, aiming for higher EBITDA per ton.
→New capacity expansions include a 1 million ton grinding unit in Karnataka expected to start by FY2024, with capex around ₹300-350 Crores.
→Government infrastructure spending is likely to double, benefiting demand in infrastructure-related segments.
→Housing demand is strong, supported by highest-ever disbursements by housing finance companies and positive guidance from real estate developers.

Margin guidance

Category 3

→Ramco Cements expects volume growth of 12% to 15% for FY2023.
→Aim to increase the share of premium products from 22% in FY2022 to 30% in FY2023, which yields Rs.200-300 higher EBITDA per ton.
→Anticipate an EBITDA level around Rs.1300 per ton with Rs.40 per bag price hike.
→EBITDA per ton was Rs.1196 in FY2022; potential to surpass Rs.1200 depends on fuel cost volatility.
→Pending capex of Rs.1350 Crores over next two years with approx. Rs.600 Crores expected to be spent in FY2023.
→New grinding unit capacity of 1 million ton expected by FY2024 to support growth.
→Debt expected to reduce by Rs.500 Crores in FY2023, improving financial health.
→Infrastructure and housing demand growth, especially in East and South regions, support volume expansion and profit growth.

Get access to all 5 sections — revenue, margin, fundraise, orderbook, and capex — for The Ramco Cements Ltd and 1,400+ other companies.

Fundraise plans

- There is no mention of any new fundraising through equity. - The company plans to reduce its debt by about Rs. 500 Crores in the financial year 2023, indicating a focus on debt repayment rather than raising new debt. - Pending capex of around Rs. 1350 Crores is planned over the next two years, with around Rs. 600 Crores expected to be spent in the current year. - No clear indication of raising new debt to fund the capex, and with efforts to reduce overall debt, it suggests capex might be funded through internal accruals or existing resources. - Management stated that for the Link Logistics investment, no further capital infusion is planned from Ramco Cement. In summary, no explicit plans for new debt or equity fundraising were disclosed; focus remains on debt reduction and managing capex within current resources.

Order book

→The transcript from the provided pages does not explicitly mention the current or expected orderbook or pending orders for The Ramco Cements Limited as of May 23, 2022.
→However, it is indicated that the company is receiving orders from infrastructure companies due to increased government spending, especially in road construction, which is doubling expenditure.
→The management also highlighted robust demand in housing and commercial spaces, contributing positively to order inflows.
→There is a general positive outlook on demand growth, especially in the eastern region, supported by infrastructure and housing development.
→No specific quantitative data on orderbook or pending orders is provided in the discussion on these pages.

Capex plans

Yes

→Pending capex of approximately Rs. 1350 Crores over the next two years, with around Rs. 600 Crores expected to be spent in FY2023. This includes both operating and growth capex.
→New grinding unit of about 1 million tons capacity planned in Karnataka, with a capex of Rs. 300-350 Crores, expected to be operational by FY2024.
→Revival of a small grinding unit in Mathodu, Karnataka, expected to start at 30-40% capacity utilization from 1st July.
→Cement plant at Kurnool to be fully commissioned before 30th June.
→Plans to add grinding capacity in Maharashtra are being considered but the site is not yet finalized.
→Won one limestone block in Karnataka at a very cheap base price for future raw material security.
→No further capital infusion planned in Link Logistics; Ramco Cement to remain an investor only.

How does The Ramco Cements Ltd rank vs peers in Cement & Cement Products?

Pro feature

1The Ramco Cements Ltd

Rev 3Mar 3

See full Cement & Cement Products sector rankings

Unlock with Pro

Want more stocks like The Ramco Cements Ltd?

Build an AI portfolio filtered by sector, market cap, and growth rank. Takes 2 minutes.

Build my portfolio