RAMCOCEM - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.2

📊 Core Financials Breakdown

Profitability

ROCE: 4.83% and ROE: 1.56% — weak return metrics, indicating poor capital efficiency.

EPS: ₹19.8 — modest, especially given the high valuation.

Quarterly PAT jumped from ₹24.2 Cr. to ₹86.0 Cr. — a 142% surge, but sustainability is uncertain.

Balance Sheet

Debt-to-equity: 0.62 — moderate leverage, manageable but worth monitoring.

Dividend Yield: 0.19% — negligible, not attractive for income investors.

Institutional Sentiment

FII holding increased by 1.14%, while DII holding dropped by 2.29% — mixed signals.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 175 Extremely high — suggests severe overvaluation.

P/B Ratio ~3.35 Reasonable for a capital-intensive industry.

PEG Ratio -3.52 Negative — reflects inconsistent or declining earnings growth.

Intrinsic Value ~₹900–₹950 (est.) Current price of ₹1,062 is above fair value.

🧠 Business Model & Competitive Edge

Core Operations: Cement manufacturing with a strong presence in South India.

Strengths

Established brand and distribution network.

Beneficiary of infrastructure and housing demand.

Challenges

High input costs and regional demand cyclicality.

Weak profitability and high valuation multiples.

Brokerages like CLSA and Citi have issued cautious outlooks, citing exposure to weaker southern markets

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📈 Technicals & Entry Guidance

DMA 50: ₹1,074, DMA 200: ₹1,004 — price is hovering near short-term average, slightly above long-term.

RSI: 48.0 — neutral zone.

MACD: -13.0 — bearish momentum.

📌 Entry Zone: ₹950–₹990 — accumulation zone if price corrects and fundamentals improve.

🕰️ Long-Term Holding Guidance

Outlook: Mixed. While Qtr profit has improved, valuation is stretched and return metrics are weak.

Analyst Targets: Average price target is ₹1,052, suggesting limited upside from current levels

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Holding Strategy: Cautious long-term hold. Suitable only if you're bullish on cement sector recovery and willing to wait for margin expansion.

Let me know if you'd like a peer comparison with Ultratech or Shree Cement to sharpen your view.

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