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RAMCOCEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | RAMCOCEM | Market Cap | 25,704 Cr. | Current Price | 1,088 ₹ | High / Low | 1,209 ₹ |
| Stock P/E | 133 | Book Value | 322 ₹ | Dividend Yield | 0.18 % | ROCE | 4.83 % |
| ROE | 1.56 % | Face Value | 1.00 ₹ | DMA 50 | 1,060 ₹ | DMA 200 | 1,027 ₹ |
| Chg in FII Hold | -0.17 % | Chg in DII Hold | -0.33 % | PAT Qtr | 74.3 Cr. | PAT Prev Qtr | 86.0 Cr. |
| RSI | 54.4 | MACD | 10.5 | Volume | 1,09,989 | Avg Vol 1Wk | 3,73,614 |
| Low price | 788 ₹ | High price | 1,209 ₹ | PEG Ratio | -2.69 | Debt to equity | 0.62 |
| 52w Index | 71.2 % | Qtr Profit Var | 190 % | EPS | 21.9 ₹ | Industry PE | 30.0 |
📊 Core Financials
- Revenue Growth: Quarterly PAT declined from 86.0 Cr. to 74.3 Cr., showing weak momentum.
- Profit Margins: EPS at 21.9 ₹, but margins remain thin relative to valuation.
- Debt Ratios: Debt-to-equity at 0.62, moderate leverage for a capital-intensive industry.
- Cash Flows: Likely under strain given high debt and modest profitability.
- Return Metrics: ROCE at 4.83% and ROE at 1.56% are very weak, indicating poor efficiency.
💹 Valuation Indicators
- P/E Ratio: 133, far above industry average (30.0), suggesting extreme overvaluation.
- P/B Ratio: ~3.38 (Current Price / Book Value), relatively high compared to peers.
- PEG Ratio: -2.69, negative, reflecting poor growth prospects.
- Intrinsic Value: Current price (1,088 ₹) trades above DMA 50 (1,060 ₹) and DMA 200 (1,027 ₹), but fundamentals do not justify premium.
🏢 Business Model & Competitive Advantage
- Operates in cement manufacturing, a cyclical and capital-heavy industry.
- Competitive advantage limited; faces strong competition from larger peers with better efficiency.
- Weak return ratios and high valuation undermine long-term attractiveness.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only near 950–1,000 ₹ if valuation cools down, given overvaluation risks.
- Long-Term Holding: Risky unless profitability improves significantly. Current fundamentals do not support long-term holding at present valuations.
Positive
- EPS of 21.9 ₹ indicates profitability despite weak margins.
- Stock trading above DMA 50 and DMA 200, showing technical support.
- Quarterly profit variance at 190% suggests some operational improvement year-on-year.
Limitation
- Extremely high P/E ratio (133) compared to industry average.
- Weak ROCE and ROE highlight poor capital efficiency.
- Dividend yield at 0.18% offers negligible shareholder return.
Company Negative News
- Quarterly PAT declined from 86.0 Cr. to 74.3 Cr.
- Decline in both FII (-0.17%) and DII (-0.33%) holdings.
Company Positive News
- Technical indicators show MACD positive and RSI stable at 54.4.
- Stock has delivered strong 52-week performance (71.2%).
Industry
- Cement industry trades at P/E of 30.0, much lower than RAMCOCEM’s valuation.
- Sector growth driven by infrastructure demand, but cyclical risks remain high.
Conclusion
- RAMCOCEM is fundamentally weak with poor return ratios and extreme overvaluation.
- Short-term technical strength exists, but long-term holding is risky unless profitability improves.
- Investors should wait for correction towards 950–1,000 ₹ before considering entry.
Would you like me to also prepare a peer comparison HTML table (RAMCOCEM vs Ultratech, Shree Cement, ACC) to highlight relative valuation and efficiency metrics?