Ramco Industries Ltd, part of the Ramco Group, is engaged in the building materials sector – fibre cement sheets, boards, and allied products. Its financial profile shows stability with improving valuations, though profitability efficiency is still modest.
Recent Financial & Valuation Trends (Q1 FY23 – Q1 FY25)
Latest financial statistics:
P/E Ratio: Declined from 19.69 (Q1 FY24) to 11.64 (Q4 FY24), currently at 15.10 (Q1 FY25).
Indicates that the stock valuation cooled off in late FY24 but has recently re-rated upwards in FY25 with improving earnings outlook.
P/S Ratio: Ranged between 0.95 – 1.90; currently at 1.90, suggesting the stock is now priced at nearly 2x sales, showing higher investor optimism.
P/B Ratio: Improved from 0.38 (Q2 FY23) to 0.74 (Q1 FY25).
Market is now valuing Ramco closer to its book value, signaling reduced undervaluation.
EV/EBITDA: Fluctuated between 10.76 – 15.85, with the latest at 15.85.
This indicates a premium relative to operating earnings, showing stronger investor confidence.
Shares Outstanding: Slight increase from 83.64M (Q1 FY23) to 86.81M (Q1 FY25)—dilution is minimal.
Business Strengths
Low Leverage: Debt/equity remains ~0.06x, ensuring balance sheet stability.
Revenue Growth: TTM revenues around ₹1,640 crore, steadily growing over years.
Undervaluation Converging: P/B ratio approaching 1×; historically undervalued status is narrowing.
Key Concerns
Low ROE & ROCE (~3–5%): Returns on capital remain weak.
Earnings Volatility: Profits fluctuate with input costs and cyclical demand.
Premium EV/EBITDA: Current ratio (15.85×) indicates stock is not cheap relative to cash flows.
Overall Fundamental View:
Ramco is moving from a deeply undervalued zone towards a fair valuation. The company’s fundamentals remain stable with low debt and steady sales, but profitability efficiency must improve to justify further re-rating.
Technical Overview
The weekly chart shows a strong breakout above its all-time high resistance of ₹366.65, a barrier that capped prices since 2021–2022.
Breakout Confirmation: sustained close above ₹355 signals bullish momentum.
Support Zone (Reversal): ₹277 – ₹311 acts as the accumulation / safety net.
Upside Targets:
R1: ₹440
R2: ₹512
R3: ₹634
This breakout comes after years of consolidation, supported by improving valuations, making it a high-probability momentum trade.
Conclusion
Ramco Industries presents a techno-fundamental convergence:
Fundamentally: A debt-free, stable company moving from undervaluation to fair valuation, with improving P/B and re-rated P/E. Earnings stability and better margins are needed to sustain higher valuations.
Technically: A decisive breakout above ₹366.65 opens the path towards ₹440–₹512 in the medium term, with ₹634 as a long-term extension target.
For long-term investors: Gradual accumulation on dips towards ₹311 zone is ideal.
For swing traders: Riding the breakout momentum above ₹355 looks attractive with defined upside targets.
Disclaimer: lnkd.in/gJJDnvn2
Recent Financial & Valuation Trends (Q1 FY23 – Q1 FY25)
Latest financial statistics:
P/E Ratio: Declined from 19.69 (Q1 FY24) to 11.64 (Q4 FY24), currently at 15.10 (Q1 FY25).
Indicates that the stock valuation cooled off in late FY24 but has recently re-rated upwards in FY25 with improving earnings outlook.
P/S Ratio: Ranged between 0.95 – 1.90; currently at 1.90, suggesting the stock is now priced at nearly 2x sales, showing higher investor optimism.
P/B Ratio: Improved from 0.38 (Q2 FY23) to 0.74 (Q1 FY25).
Market is now valuing Ramco closer to its book value, signaling reduced undervaluation.
EV/EBITDA: Fluctuated between 10.76 – 15.85, with the latest at 15.85.
This indicates a premium relative to operating earnings, showing stronger investor confidence.
Shares Outstanding: Slight increase from 83.64M (Q1 FY23) to 86.81M (Q1 FY25)—dilution is minimal.
Business Strengths
Low Leverage: Debt/equity remains ~0.06x, ensuring balance sheet stability.
Revenue Growth: TTM revenues around ₹1,640 crore, steadily growing over years.
Undervaluation Converging: P/B ratio approaching 1×; historically undervalued status is narrowing.
Key Concerns
Low ROE & ROCE (~3–5%): Returns on capital remain weak.
Earnings Volatility: Profits fluctuate with input costs and cyclical demand.
Premium EV/EBITDA: Current ratio (15.85×) indicates stock is not cheap relative to cash flows.
Overall Fundamental View:
Ramco is moving from a deeply undervalued zone towards a fair valuation. The company’s fundamentals remain stable with low debt and steady sales, but profitability efficiency must improve to justify further re-rating.
Technical Overview
The weekly chart shows a strong breakout above its all-time high resistance of ₹366.65, a barrier that capped prices since 2021–2022.
Breakout Confirmation: sustained close above ₹355 signals bullish momentum.
Support Zone (Reversal): ₹277 – ₹311 acts as the accumulation / safety net.
Upside Targets:
R1: ₹440
R2: ₹512
R3: ₹634
This breakout comes after years of consolidation, supported by improving valuations, making it a high-probability momentum trade.
Conclusion
Ramco Industries presents a techno-fundamental convergence:
Fundamentally: A debt-free, stable company moving from undervaluation to fair valuation, with improving P/B and re-rated P/E. Earnings stability and better margins are needed to sustain higher valuations.
Technically: A decisive breakout above ₹366.65 opens the path towards ₹440–₹512 in the medium term, with ₹634 as a long-term extension target.
For long-term investors: Gradual accumulation on dips towards ₹311 zone is ideal.
For swing traders: Riding the breakout momentum above ₹355 looks attractive with defined upside targets.
Disclaimer: lnkd.in/gJJDnvn2
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.