CLSA upgrades Ramco Cements to 'buy' from 'sell'
Ramco Cements has had weak FY18 due to pressures in Tamil Nadu, weak pricing and cost pressures.
By ET Bureau |
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MUMBAI: CLSA has upgraded Ramco Cements to 'buy' from 'sell' and raised target price to Rs 930 from Rs 700.
"We upgrade Ramco from SELL to BUY and raise TP to Rs930 (from Rs700) on a higher multiple at 15x FY20CL as earnings growth accelerates and balance sheet strengthens," said CLSA.
The brokerage said Ramco Cements has had a weak FY18 due to pressures in Tamil Nadu, weak pricing and cost pressures.
"Outlook is improving, as channel checks indicate demand pick-up in Tamil Nadu, a key state for Ramco. Costs have also peaked and ongoing efforts should drive savings (blending, logistics and energy).
Volume growth would also improve as new units come on-stream in the next 12-18 months," said CLSA.
Despite the ongoing capital expenditure, external debt should be negligible by March 2020, said CLSA.
"We upgrade Ramco from SELL to BUY and raise TP to Rs930 (from Rs700) on a higher multiple at 15x FY20CL as earnings growth accelerates and balance sheet strengthens," said CLSA.
The brokerage said Ramco Cements has had a weak FY18 due to pressures in Tamil Nadu, weak pricing and cost pressures.
"Outlook is improving, as channel checks indicate demand pick-up in Tamil Nadu, a key state for Ramco. Costs have also peaked and ongoing efforts should drive savings (blending, logistics and energy).
Volume growth would also improve as new units come on-stream in the next 12-18 months," said CLSA.
Despite the ongoing capital expenditure, external debt should be negligible by March 2020, said CLSA.
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