The March quarter earnings for FY22 of the Ramco Cement Ltd, launched publish market hours on Monday, have been disappointing, to say the least. Quantity development on a year-on-year (y-o-y) foundation was flat at 3.19 million tonnes. Working margin at 17.3%, was larger than consensus estimate of 16.6%, however declined round 1,040 foundation factors, y-o-y, impacted by continued enter price inflation. One foundation level is 0.01%.
Consequently, shares of the corporate hit a brand new 52-week low of Rs656.35 on the NSE in Tuesday’s opening commerce.
In a publish earnings convention name, the corporate’s administration mentioned, volumes have been hit by continued monsoon in its key market of South India till January 2022. Within the month of February, the corporate tried to cut back dispatches within the East as cement costs in that area have been low. Nevertheless, the present volumes tendencies is best than it was in March quarter, the administration added.
However this doesn’t present a lot consolation to buyers. In response to the administration, cement costs are nonetheless unstable in a couple of markets of the South area. At present, the common worth enhance stands at Rs10-15/bag in comparison with March, however to offset price inflation, a hike of Rs40/bag can be wanted. The administration additional identified that on a per tonee foundation, its vitality cosr rose Rs691 in 4QFY22 and Rs460 in FY22 on account of vital enhance in petroleum coke (petcoke) and coal worth. Petcoke consumption price for the corporate needs to be at $225/tonne in 1QFY23 in comparison with $190/tonne in 4QFY22, the administration mentioned.
“We’ve reduce our Ebitda estimate by 24%/7% for FY2023/24 factoring larger prices and decrease volumes partially offset by larger costs. The corporate continues to disappoint with weak working efficiency and delays in ramping up of growth tasks,” analyst at Kotak Institutional Equities mentioned in a report on 24 Could. Ebitda is brief for earnings earlier than curiosity, tax, depreciation and amortization.
The administration mentioned that it goals to fee a brand new grinding unit in Karnataka by FY24 at a capex of round Rs350 crore. Additional, the cement grinding facility, 12 megawatts of waste warmth restoration system and 18 megawatts of thermal energy plant in Kurnool are anticipated to be commissioned throughout FY23.
Analysts at Nirmal Bang Institutional Equities are of the view that whereas new clinker capability at Kurnool will enhance clinker availability for grinding in East in addition to South, ramping up the plant initially shall be a problem given the weak demand scenario.