1. At a Glance
Ramco Industries is the quiet middle child of the Ramco family – manufacturing fiber cement sheets, dabbling in wind energy, spinning yarn (literally), and hoarding investments bigger than its own market cap. Hidden value? Sure. Trapped value? That too.
2. Introduction with Hook
Imagine if your grandfather built a cement roof, invested in half the market, and forgot to tell you it’s worth 4,500 crores. That’s Ramco Industries. With a market cap of just ₹2,500 Cr, and investments nearly double that, it’s basically a walking undervaluation meme.
- Market Cap: ₹2,504 Cr
- Value of Investments: ₹4,538 Cr
- Book Value: ₹488 (Stock trades at 0.59x BV)
Yet, growth? Slower than Windows 98 on dial-up.
3. Business Model (WTF Do They Even Do?)
Segment Buffet:
- Fiber Cement Sheets (FC): Classic asbestos-free roofing material. Rural-focused.
- Calcium Silicate Boards (CSBs): Think fire-resistant interior construction.
- Wind Power: Because… why not.
- Spinning Cotton Yarn: Industrial legacy flex.
- Treasury Play: Ramco holds listed and unlisted investments, including in sister firms like The Ramco Cements and Ramco Systems.
Basically: Half manufacturing, half family office, and 0% clarity for investors.
4. Financials Overview
Profit and Loss Highlights (FY25):
| Metric | FY25 |
|---|---|
| Revenue | ₹1,659 Cr |
| EBITDA | ₹179 Cr |
| OPM | 11% |
| Net Profit | ₹181 Cr |
| EPS | ₹20.84 |
| Dividend Payout Ratio | ~5% |
Growth Rates:
- 5Y Sales CAGR: 11%
- 3Y Sales CAGR: 4%
- 3Y Profit CAGR: -16% (ouch)
So yes, profits have been on a slow bike ride through a headwind.
5. Valuation
Current Price = ₹289
Book Value = ₹488
Investments ≈ ₹4,538 Cr
Market Cap = ₹2,504 Cr
Fair Value Estimate:
- Base Case (Sum of Parts):
– Core business (10x PAT ₹181 Cr) = ₹1,810 Cr
– Investments at 50% haircut = ₹2,269 Cr
– Total = ₹4,079 Cr → FV = ₹470/share - Bull Case:
– Investments re-rated to full value = ₹4,538 Cr
– Total FV = ₹6,348 Cr → FV = ₹730/share
EduInvesting FV Range: ₹470 – ₹730
Because one man’s “holding company discount” is another’s “I told you so.”
6. What’s Cooking – News, Triggers, Drama
- GST penalty of ₹19L for FY21–23 got dropped (mini relief).
- Utilized ₹100 Cr NCD proceeds fully — no deviation.
- FIIs increased stake in Q1 FY26 (now at 1.13% vs 0.81% in March).
- Board meetings remain dry as fiber cement.
- No demerger / unlocking announcements yet — but the market drools at that possibility.
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity Capital | ₹9 Cr |
| Reserves | ₹4,224 Cr |
| Borrowings | ₹256 Cr |
| Investments | ₹3,340 Cr |
| Total Assets | ₹4,783 Cr |
Key Points:
- Net debt-to-equity: Comfortably low.
- Fixed assets steady, but growth capex muted.
- Investment book grew 10% YoY — stealth compounding!
8. Cash Flow – Sab Number Game Hai
| Cash Flow Item | FY25 (₹ Cr) |
|---|---|
| Operating CF | ₹132 |
| Investing CF | -₹107 |
| Financing CF | -₹11 |
| Net Cash Flow | ₹14 |
Key Observations:
- Capex tightly managed.
- Free cash flow positive.
- Dividends stingy.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 4.36% |
| ROCE | 3.61% |
| OPM | 11% |
| Inventory Days | 232 |
| Cash Conversion Cycle | 237 days |
Interpretation:
Return ratios? Weak.
Working capital cycle? Long AF.
But if you love undervaluation, this is like Tinder Gold.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹1,458 Cr | ₹152 Cr | ₹124 Cr | ₹14.28 |
| FY24 | ₹1,501 Cr | ₹157 Cr | ₹106 Cr | ₹12.18 |
| FY25 | ₹1,659 Cr | ₹179 Cr | ₹181 Cr | ₹20.84 |
Key Trend:
FY25 saw a sharp jump in PAT – mainly due to other income (investments), not core biz.
11. Peer Comparison
| Company | P/E | ROCE | CMP/BV | OPM |
|---|---|---|---|---|
| Ramco Industries | 13.8 | 3.61% | 0.59 | 11% |
| Everest Industries | NA | 0.72% | 1.56 | 1.74% |
| Arisinfra Solutions | 388.3 | 12.26% | 1.78 | 6.52% |
| Vishnusurya Projects | 14.1 | 23.96% | 2.62 | 18.03% |
Ramco takeaway:
On paper, it’s a value stock. In practice, it’s a confused stock. Peer group doesn’t even operate in the same strategic orbit.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 54.81% |
| FIIs | 1.13% |
| DIIs | 3.85% |
| Public | 40.22% |
Notes:
- Promoter holding stable, no pledge.
- FIIs crawling back in.
- Over 30,000 shareholders. Most probably forgot why they invested.
13. EduInvesting Verdict™
Ramco Industries is the epitome of “old money, no mojo.” It has rock-solid assets, an investment portfolio that would make a PMS blush, and a core business that’s profitable but tired.
If management ever decides to unlock value (read: spin-off, sell investments, increase dividends), this could go from sleepy to screamy.
Until then? It’s the value investor’s version of a Zen garden: boring, deep, and possibly worth something someday.
Metadata
– Written by EduInvesting Team | 18 July 2025
– Tags: Ramco Group, Fiber Cement, Holding Company Discount, Value Investing, Hidden Gems, Cement Sheets, Wind Energy
