RAMCOCEM - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 2.4

📊 Fundamental Analysis of RAMCOCEM (The Ramco Cements Ltd.)

✅ Positives

Improving PAT: ₹19.8 Cr vs ₹4.79 Cr — signs of recovery

Strong Technical Momentum

RSI: 66.4 — bullish but nearing overbought

MACD: 33.6 — strong upward momentum

Price above both DMA 50 and DMA 200 — confirms uptrend

FII Interest: +1.14% — foreign investors increasing stake

EPS: ₹11.5 — modest earnings base

⚠️ Major Concerns

Extremely High P/E (279) vs Industry PE of 51.1 — massively overvalued

Negative PEG Ratio (-5.42) — indicates earnings contraction despite high valuation

Weak Return Metrics

ROCE: 4.77%

ROE: 1.38% — poor capital efficiency

Low Dividend Yield: 0.17% — not attractive for income investors

DII Exit: -2.29% — domestic institutions reducing exposure

Qtr Profit Var: -84.6% — volatile earnings history

Debt-to-Equity: 0.63 — moderate leverage

📉 Valuation & Ideal Entry Zone

Given the current price of ₹1,193 (near 52-week high) and stretched valuation

Ideal Entry Zone: ₹950–₹1,020

Closer to DMA 200 and below psychological ₹1,000 level

Wait for valuation to cool and earnings to stabilize

🧭 Long-Term Investment Outlook

RAMCOCEM is not a strong long-term candidate at current levels. Despite technical strength, the fundamentals — especially valuation and return metrics — do not support sustainable compounding.

Hold only if already invested and riding momentum

Holding Period: Short to medium term (6–12 months) unless ROE/ROCE improve and P/E compresses

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹1,200–₹1,250

Near 52-week high and overbought RSI

Full Exit: If earnings remain volatile and ROE stays below 5%

Reinvest only if PEG turns positive and P/E drops below 100

Would you like a comparison with peers like Ultratech or Shree Cement to evaluate better long-term cement plays?

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