RAMCO INDUSTRIES LTD
Flagship company of the Ramco group, RIL is a company engaged in manufacture of fibre cement sheets. It also manufactures roofing accessories, fibre cement pressure pipes etc.
Debt (as on fy 12) )— long term 114 cr + short term 57 crores â total debt is 173 crores. Cash and equivalents is 13 crores.
Enterprise value for ramco comes to 740 crores. (market cap 580 crores +173 crores debt -13 crores cash)
For fy 12, company made sales of 674 crores and made net profit of around 62 crores. For h1 fy 13 sales was 430 crores (h1 fy 11 sales at 324 cr) and net profits of 32 crores (h1 fy 11 net profit at 29 croresâfirst half of fy 12 also included profit on sale of land of around 9 crores).
Company holds 4.93 crores shares of madras cements and based on current market price of madras cements of rs 200 per share, the holding value comes to around 950-1000 crores.
There are rumours of stake sale by promoters of Madras cements to Lafarge or some other big cement players. If this happens then there could be a big value unlocking for Ramco inds shareholders.
By itself, the business of Ramco Inds is quite robust and if the trigger of cement business of Madras cements materializes, stock could give excellent returns.
disc: starter position taken in stock today at around 66.