BSE Code: | NSE Code: | ISIN: | Sector:
Research Report Detail
|Report Date||Call||Price@Call||Target Price
|Current Status||Time Horizon|
|Target Hit|| Long (1Y)
Reliance Securities maintains buy on Ramco Cements
Though 2QFY18 result is expected to be
subdued owing to seasonal effects, RCL is expected to deliver better
profitability in ensuing quarters with the visible reduction in debts and
better operating synergies. We believe that a possible uptick in utilization
backed by improvement in southern consumption, sound profitability, consistent
balance sheet de-leveraging (reduced debt by Rs6.9bn in FY17), and strong brand
equity will aid RCL to reshape its growth, going forward.
Moreover, visible change in fuel-mix and 12MW new CPP will improve its operating synergy further.
We envisage improved operating efficiency with no meaningful capex would lead to healthy Free Cash Flow (FCF) generation to the tune of Rs20bn over next two years.