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
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Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.
Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.