Shares of Ramco Cements tumbled 8 percent in early trade on Tuesday after the company reported a 59 percent decline in standalone profit in the December quarter to Rs 83 crore on account of faltering demand.
At 10:50 am, Ramco Cements shares were trading at Rs 839.45, down 6.41 percent, or 57.45 points on the BSE.
Sales from products, however, rose 16 per cent to Rs 1,541 crore for the quarter under review. Earnings before interest, tax, depreciation and amortization (Ebitda) fell 42 percent year-on-year at Rs 230 crore.
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CLSA downgraded the stock to 'underperform' from 'outperform', and reduced its target price to Rs 970 from Rs 1,180. The company's Q3 EBITDA was below estimates on lower profitability contrary to industry trends, according to the brokerage.
The company’s profit before tax fell 62 percent at Rs 113 crore, against Rs 298 crore in the year-ago quarter, the company said in an exchange filing. Net revenue for the December 2021 quarter grew 16 per cent to Rs 1,556 crore against Rs 1,345 crore reported in the quarter ending December 2020.
Management stated on a post-earnings conference call that 4QFY22 is experiencing easing costs, rising prices, and demand resurgence and that 4QFY22 and 1QFY23 would be positive quarters.
It further stated that the corporation no longer has any high-cost power and fuel inventory and would switch to low-cost inventory in January 2022. The February 2022 contractual inventory price is lower than the October-November 2021 contracted inventory price.
