Ramco Cements Q2 Shock: EBITDA Beats, Costs Bite! ICICI Securities Holds With New Target Price!

ICICI Securities has released a research report on The Ramco Cements, detailing its performance in the second quarter of FY26. The company reported an EBITDA of INR 3.9 billion, which was 24% higher year-on-year but 3% lower quarter-on-quarter. This figure slightly exceeded estimates by 4%, largely driven by a substantial 13% beat in sales volume, which was up 10% sequentially. However, the cost structure presented challenges, with 'other expenses' rising by 15% year-on-year and variable costs per ton inching up by 1% quarter-on-quarter.

Considering the performance in the first half of FY26 and a cautious outlook for cement prices in the near term, attributed to the transition phase of GST rate cuts, analysts have revised their EBITDA estimates. FY26 EBITDA has been cut by 11% and FY27E EBITDA by 7%. The report also points to high leverage, with a net debt to EBITDA ratio of 2.4x for FY26, and a muted Return on Equity (RoE) profile projected at 5-9% over the next two years.

Impact: This news directly affects investors holding or considering shares of Ramco Cements by providing an expert analyst's view on its recent performance and future outlook. It can influence trading decisions, stock price movements, and sentiment towards the cement sector in India. Rating: 7/10

Difficult Terms: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. YoY: Year-over-Year. Compares a period with the same period in the previous year. QoQ: Quarter-over-Quarter. Compares a period with the previous quarter. GST: Goods and Services Tax. A tax levied on the supply of goods and services in India. EV/EBITDA: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. A valuation metric comparing a company's total value to its operating profit. RoE: Return on Equity. A profitability ratio that measures how effectively a company uses shareholders' investments to generate profits. Net Debt/EBITDA: Net Debt to Earnings Before Interest, Taxes, Depreciation, and Amortization. A leverage ratio indicating how many years it would take to pay back debt from operating cash flow.