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Ramco Cem: Sales drop but margins expand - Views on News from Equitymaster

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Ramco Cem: Sales drop but margins expand
Nov 25, 2015

The Ramco Cements Ltd (formerly known as Madras Cements Ltd) has announced its financial results for the quarter ended September 2015. While the company's sales declined by 5.2% YoY, net profits reported a sharp recovery of 54.6% YoY during the second quarter of FY2015-16 (2QFY16). Here is our analysis of the results:

Performance Summary

  • Net sales drop 5.2% YoY during the quarter ended September 2015 (2QFY16).
  • Operating margins witness a sharp improvement as most major cost heads witness a decline.
  • Driven by the higher operating profit, bottomline rises by 54.6% YoY during the quarter.

Standalone and Consolidated financials

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 9,221 8,740 -5.2% 18,463 17,966 -2.7%
Expenditure 7,351 6,005 -18.3% 15,228 13,000 -14.6%
Operating profit (EBITDA) 1,870 2,736 46.3% 3,235 4,965 53.5%
EBITDA margin 20.3% 31.3%   17.5% 27.6%  
Other income 318 199 -37.4% 685 501 -26.8%
Depreciation 624 671 7.6% 1,251 1,339 7.1%
Finance cost 480 453 -5.7% 980 940 -4.1%
Profit before tax 1,084 1,811 67.1% 1,689 3,187 88.7%
Tax 187 423 127.0% 429 825 92.2%
Effective tax rate 17.2% 23.4%   25.4% 25.9%  
Profit after tax 897 1,387 54.6% 1,260 2,362 87.5%
PAT margin 9.7% 15.9%   6.8% 13.1%  
Extraordinary gain/(loss) - -   - -  
Net profit 897 1,387 54.6% 1,260 2,362 87.5%
Net profit margin 9.7% 15.9%   6.8% 13.1%  
No of shares (m)       238.0 238.1  
Diluted EPS (Rs)*         14.8  
P/E (times)*         25.2  

*trailing twelve month earnings

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