RAMCO INDUSTRIES – a good pic for capital gains…

Ramco Industries Ltd., incorporated in the year 1965, is a Small Cap company (having a market cap of Rs 1514.87 Crore) operating in Building Materials sector.

 

Ramco Industries Ltd. key Products/Revenue Segments include Building Products which contributed Rs 874.67 Crore to Sales Value (97.42 % of Total Sales), Royalty Income which contributed Rs 15.40 Crore to Sales Value (1.71 % of Total Sales), Other Operating Revenue which contributed Rs 6.08 Crore to Sales Value (0.67 % of Total Sales) and Wind Power which contributed Rs 1.60 Crore to Sales Value (0.17 % of Total Sales)for the year ending 31-Mar-2019.

 

For the quarter ended 31-03-2020, the company has reported a Consolidated sale of Rs 231.49 Crore, up 16.04 % from last quarter Sales of Rs 199.49 Crore and down -12.36 % from last year same quarter Sales of Rs 264.13 Crore Company has reported net profit after tax of Rs 18.38 Crore in latest quarter.

 

Part of the Chennai based “ Ramco Group “, Ramco Industries is one of the very few Holding Companies in the listed space having a stable business with a long growth runway in Roofing.

With 10 manufacturing facilities strategically located, Ramco Industries is well positioned to play the Rural Growth Story in India since demand for its products largely remains unaffected even during the Pandemic. Its brands Ramco Build, Hilux, Hicem, Poweroof & Greencor have a strong brand equity among customers.

Our Interaction with dealers’ points towards strong demand aided by a good rabi group and migrants returning back to villages. GOI initiatives is helping Ramco as it has a strong brand equity and a robust distribution network with over 15% market share in Fibre Cement Roofing as well as in Boards & Panels.

Virtually debt-free, Ramco Industries present MCAP not even takes into account the value of its 21% equity stake in Ramco Cement even after considering holding company discount. Trading at 0.4x Book Value the Single-Digit PE multiples in our view do not really capture the inherent strength and resilience displayed by its Business Model during the Pandemic. Accumulate Ramco Industries for a potential upside of 50% from present levels.

 

Factory Locations

ANDHRA PRADESH                  -              Vijayawada

BIHAR                                    -             Bihiya

DADRA & NAGAR HAVELI         -           Silvassa

GUJARAT                                -              Kutch

KARNATAKA                            -              Ranebennur

MADHYA PRADESH                  -              Maksi

RAJASTHAN                           -              Keshwana

TAMIL NADU                          -              Arakkonam

WEST BENGAL                       -              Hariatara

SRILANKA                              -              Gonawila

The financial results of last 5 financial years are showing continuous growth of the Company. Find the data in the below pic. 

The stock performance compared with the Nifty is as per the below picture.

 

Presently this stock is trading at Rs 174 and expecting to raise at 50% from the present levels. Start investing in dips and accumulate for your wealth build-up.

 

Exchequer Business Services. We provide platform for trading in Capital Markets and also training in Fundamentals and Technical Analysis.

Note: The analysis is based on the information received from the company fundamentals and its technical trends. Investing in securities always depending upon the market conditions and risk. 

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