1. At a Glance
Once a rock-solid name in South India’s cement world, The Ramco Cements is now struggling to stay relevant in an industry where competition is harder than cured concrete. With falling profits, high P/E, and capex hangover, it’s time to ask—where’s the cement, Ramco?
2. Introduction with Hook
If cement stocks were students in a classroom, Ultratech is the first-bencher, Shree is the nerd, and Ramco? It’s the kid with a calculator who invested all his pocket money in gym gear but forgot to eat.
- P/E? A comical 267x.
- ROCE? A nervous 4.76%.
- FY25 profit? Just ₹270 Cr, down from ₹882 Cr in FY22.
- Stock? Up 45% YoY… fueled by vibes and hope, not earnings.
Investor logic: “Bro, capex hai. Long term story.” Reality: “Bro, ROE 1% hai.”
3. Business Model (WTF Do They Even Do?)
Ramco Cements produces:
- 12 types of cement (OPC, PPC, Sulphate-Resistant, Blended)
- Dry Mix Products (plasters, wall putty, tile adhesive)
- Ready Mix Concrete (RMC)
- Power via captive wind and thermal plants
- Logistics through own shipping and trucking arms
Their footprint is dominant in South India but slowly spreading to the East. Problem? Freight cost + market saturation = margin coma.
4. Financials Overview
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Revenue (₹ Cr) | 6,004 | 8,157 | 9,376 | 8,518 |
| EBITDA (₹ Cr) | 1,291 | 1,186 | 1,565 | 1,233 |
| Net Profit (₹ Cr) | 882 | 315 | 356 | 270 |
| EPS (₹) | 37.3 | 13.3 | 15.2 | 11.5 |
| OPM (%) | 22% | 15% | 17% | 14% |
| ROCE (%) | 9% | 6% | 8% | 5% |
Margins went from Ambuja-esque to “ab kya cement banayein bhai?” in two years.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹1,151 |
| P/E | 267x |
| Book Value | ₹315 |
| P/B Ratio | 3.66 |
| Dividend Yield | 0.17% |
| Market Cap | ₹27,222 Cr |
Fair Value Range = ₹580 – ₹750 (based on 35–45x normalized earnings power, assuming ₹15–₹17 EPS)
Yes, we’re being generous. But hope sells.
6. What’s Cooking – News, Triggers, Drama
- Approved ₹4,000 Cr in borrowing capacity (NCDs + CPs)
- Cement grinding capacity expanded to 2.4 MTPA
- Land monetization worth ₹444 Cr in FY24
- Disinvestment of 1.4 Cr shares of Ramco Industries Ltd
- FY25 EPS = ₹11.54. A cement company posting lower EPS than a smallcap pharma firm. Tragic.
And don’t forget the bonus: multiple litigation wins (including CENVAT credits). But will they win over the market?
7. Balance Sheet 💰
| Item | FY25 |
|---|---|
| Equity Capital | ₹24 Cr |
| Reserves | ₹7,418 Cr |
| Borrowings | ₹4,675 Cr |
| Other Liabilities | ₹4,213 Cr |
| Fixed Assets | ₹12,378 Cr |
| CWIP | ₹1,353 Cr |
| Investments | ₹90 Cr |
| Total Assets | ₹16,330 Cr |
Capex-driven asset expansion. But debt is sticking around like leftover cement on a mixer.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹1,412 Cr | -₹1,694 Cr | ₹274 Cr | -₹8 Cr |
| FY24 | ₹1,906 Cr | -₹1,911 Cr | -₹28 Cr | -₹33 Cr |
| FY25 | ₹1,399 Cr | -₹542 Cr | -₹782 Cr | ₹75 Cr |
Operations generate decent cash, but investments + repayments = FLAT net flow.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 4.76% |
| ROE | 1.39% |
| OPM | 14% |
| P/E | 267x |
| D/E | ~0.6 |
| Interest Cover | 1.2x |
Stressy. Like a cement bag in monsoon season.
10. P&L Breakdown – Show Me the Money
| Year | Sales (₹ Cr) | EBITDA | Net Profit | OPM % | NPM % |
|---|---|---|---|---|---|
| FY22 | 6,004 | 1,291 | ₹882 Cr | 22% | 14.7% |
| FY23 | 8,157 | 1,186 | ₹315 Cr | 15% | 3.9% |
| FY24 | 9,376 | 1,565 | ₹356 Cr | 17% | 3.8% |
| FY25 | 8,518 | 1,233 | ₹270 Cr | 14% | 3.1% |
Three-year net profit CAGR: -51%
This is not a typo. It’s a warning sign in Times New Roman Bold.
11. Peer Comparison
| Company | P/E | ROE | OPM | Sales (₹ Cr) | PAT (₹ Cr) | Mcap (₹ Cr) |
|---|---|---|---|---|---|---|
| UltraTech Cement | 60.2x | 9.3% | 16.5% | ₹75,955 Cr | ₹6,117 Cr | ₹3,68,493 Cr |
| Shree Cement | 100x | 5.3% | 20.4% | ₹19,282 Cr | ₹1,117 Cr | ₹1,12,023 Cr |
| ACC | 16.1x | 13.2% | 14.0% | ₹21,762 Cr | ₹2,307 Cr | ₹37,180 Cr |
| JK Cement | 62.8x | 13.9% | 17.1% | ₹11,879 Cr | ₹794 Cr | ₹49,889 Cr |
| Ramco Cement | 267x | 1.4% | 14.5% | ₹8,518 Cr | ₹270 Cr | ₹27,222 Cr |
On valuation, Ramco is like a Maruti Swift priced like a Lamborghini. 🚨
12. Miscellaneous – Shareholding, Promoters
| Category | % Holding (Jun 2025) |
|---|---|
| Promoters | 42.55% |
| FIIs | 8.43% |
| DIIs | 27.85% |
| Government | 3.39% |
| Public | 17.77% |
👥 Shareholders: 56,972
Trend? FII interest slowly returning. Retail love also creeping back. But is it premature?
13. EduInvesting Verdict™
Ramco Cements is betting big on capacity, expansion, and long-term demand revival. That’s admirable. But here’s the issue: profits are shrinking, debt is bloating, and margins are stuck like old cement on your jeans.
Unless demand revives and pricing power returns, this capex cycle may just be an expensive treadmill—running hard, going nowhere.
Verdict: Caution. Cement dries fast. But Ramco’s story? Still setting.
Metadata
– Written by EduInvesting Team | 15 July 2025
– Tags: Ramco Cement, Capex Story, Cement Sector India, Capacity Expansion, Infra Play, Cement Margin Pressure, NCDs, Capex Debt Risk
