RAMCO INDUSTRIES LIMITED
DATE: 16/10/2017
  • COMPANY NAME : RAMCO INDUSTRIES LIMITED
  • Description :

     

    Recommendation: Buy

    Hold 1 Year

    Target: 400 Rs.

     

    CMP: 292 Rs.

     

    BSE Code: 532369

     

    Market Capital: 2535 Cr.

     

    Face Value: 1

     

    52 Week Low / High: 128/297

     

    Book Value: 313.4

     

    P/B - 0.93

     

    Promoter Pledge: 6.63%

     

    Dividend (%): 50%

     

     

    Company Profile:

    • Ramco Industries Limited was founded in 1965 and set up its first plant at Arakkonam, Tamil Nadu for the manufacture of fibre cement roofing sheets with a production capacity of 36,000 tons per annum.
    • Ramco Industries Limited is part of the US$ 1 billion Ramco Group with interests in Cement, Dry Wall & Ceiling products, Roofing products, Cotton yarn, Surgical cotton and Computer Software.
    • With 12 plants across South Asia and a 8,000 strong partner network, Ramco Industries is one of the leading building materials manufacturers in South Asia having combined production capacity of 10,00,000 tons per annum.  
    • The company has today grown into a major building materials player in South Asia
    • Apart from fibre cement roofing sheets, the company has also forayed into manufacturing of calcium silicate boards, fibre cement boards, tiles, planks and non-asbestos roofing sheets and is one among the top players in the building materials industry in India and Sri Lanka.
    • The company has scripted a new vision of ‘Pioneering Green Dry Construction’ to protect nature and promote eco-friendly Green construction practices across the globe
    • The company operates eight modern plants manufacturing high quality fibre cement roofing sheets in India today: Gangaikondan - Tamil Nadu, Karur – Karnataka, Maksi - Madhya Pradesh, Silvassa - UT of Dadra & Nagar Haveli, Kharagpur - West Bengal, Vijayawada - Andhra Pradesh, Anjar – Gujarat, Bihiya – Bihar. The present aggregate capacity for Fibre Cement Sheets manufacture in India is over 7 lakh tons per annum.
    • Ramco Industries Ltd introduced the Ramco Hilux Calcium Silicate Board, a versatile building material, using technology from the A & A Corporation, Japan.
    • These boards are rapidly replacing conventional building materials such as Gypsum boards, Plywood & Plaster of Paris across the international markets by virtue of their sheer versatility
    • Company's Products
    • Ramco Hilux:

    Ramco Hilux boards and tiles are manufactured at the world class plant at Keshwana, Rajasthan with a production capacity of 48,000 metric tons per annum.

    Ramco’s flagship product in the Green line up is Hilux. Ramco Hilux is a Calcium Silicate Board made from siliceous and calcareous materials reinforced with cellulose fibres.

    Ramco Hilux finds niche applications across wide spectrum of industries including Pharma, Hospitality, Textile, Engineering, Information Technology and Medical care.

    • Ramco Hicem:

    Ramco Hicem Fibre Cement Boards, Tiles and Planks were introduced in 2016.

    Ramco has refurbished its first plant at Arakkonam and set up a modern plant manufacturing Ramco Hicem & Ramco Greencor with an annual production capacity of 60,000 metric tons.

    The versatility of these products makes them the ideal choice in all types of Dry construction projects.

    Ramco Industries also operates two state-of-the-art plants in Sri Lanka manufacturing fibre cement roofing sheets.

    • Ramco Greencor:

    Ramco Greencor is a new age non-asbestos roofing material made with the finest quality Portland cement, natural mineral binders and synthetic fibres and It is 100% asbestos free

    • Ramco Poweroof:

    Ramco Poweroof have given millions of homes, schools, and industries safe shelter, a healthy atmosphere and permanent protection from the elements.

     

    Financial Results:

     

    (In Cr.)

    Jun-17

    Mar-17

    Dec-16

    Sep-16

    Jun-16

    Quarterly - Income Statement

    Revenue

    265.71

    201.34

    160.2

    164.49

    233.9

    Other Income

    6.5

    17.27

    14.15

    11.03

    12.65

    Interest

    -6.73

    -6.87

    -8.66

    -8.62

    -9.39

    Depreciation

    -5.91

    -5.3

    -5.77

    -5.31

    -5.1

    Tax

    -4.83

    -2.81

    -2.19

    -4.94

    -3.31

    Net Profit

    15.73

    14.15

    4.63

    10.85

    30.25

    Equity

    8.67

    8.67

    8.67

    8.67

    8.67

    EPS

    1.82

    1.63

    --

    1.25

    3.49

    CEPS

    2.5

    2.24

    1.2

    1.86

    4.08

    OPM %

    9.96

    11.06

    13.26

    18.07

    20.54

    NPM %

    5.92

    7.03

    2.89

    6.6

    12.93

     

     

    (In Cr.)

    2017

    2016

    2015

    2014

    2013

    Yearly - Income Statement

    Revenue

    785.3

    722.97

    753.15

    686

    791.38

    Other Income

    43.38

    31.22

    7.8

    6.04

    13.2

    Interest

    -33.54

    -37.97

    -37.03

    -33.66

    -28.92

    Depreciation

    -21.48

    -19.61

    -18.89

    -43.25

    -33.18

    Tax

    -13.25

    5.68

    1.17

    8.79

    -10.2

    Net Profit

    59.88

    33.69

    20.93

    -6

    54.49

    Equity

    8.67

    8.67

    8.67

    8.67

    8.67

    EPS

    6.91

    3.89

    2.41

    -0.69

    6.28

    CEPS

    9.38

    6.15

    4.59

    4.3

    10.11

    OPM %

    12.05

    11.84

    10.05

    9.06

    16.02

    NPM %

    7.63

    4.66

    2.78

    -0.87

    6.89

     

    Investment Rational

    1. It has strong reserves of 47 times equity
    2. Strong player in building material business
    3. Strong rise in net profit margin from -0.87 to 7.63% from last 4 years
    4. 76% Strong rise in net profit on YOY basis but down 95% on QoQ basis.
    5. 13% rise in net sale on QoQ basis & 8% on YOY basis
    6. Suspecting growth for Construction material due to Government focus on rural house
    7. Suspecting strong industrial growth which will give benefits to company.

     

    Recommendation:

    • Stock CMP is 292 Rs. and stock is trading at P/E 55 & TTM EPS 5.23, based on all above investment points, stock may touch 350 Rs. within 6 months and 400 Rs within a years’ time horizon.

     

    Please note:

    • Note: The articles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

      Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

      Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.

     

     

     

     

     

     

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