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#EBITDA #GROWTH

In FY25, EBITDA per ton was โ‚น690, lower by 20% on a YoY basis. The company generated an EBITDA of โ‚น1,595 cr in the same period, it de-grew by 20% YoY. The cost of producing a tonne of cement reduced by 7% YoY to โ‚น3,915. Lower EBITDA can be attributed to lower realisation in South and East markets. In FY24, the EBITDA stood at โ‚น1,595 cr and EBITDA per ton stood at โ‚น867 compared to โ‚น796 in FY23. The power & fuel cost per ton of cement for FY24 has decreased to โ‚น1,389 compared to โ‚น1,771 in FY23. The change in utility of sale of wind power to captive use has also helped to reduce the overall power cost. The overall green power usage has significantly improved from 22% in FY23 to 34% in FY24 in view of change in utility of wind power to captive purposes. Cost of raw materials increased by 5% YoY from โ‚น903 to โ‚น948 per ton for the current year due to inflationary impact on procurement cost.
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#PAT #GROWTH

In FY25, they generated a PAT of โ‚น268 cr. On a YoY basis PAT declined by 32%. During the period, finance cost and depreciation increased by 10% and 8% YoY, respectively. Increase in finance cost and depreciation was on account of commissioning of new capacity. During the quarter and year ended 31st March 2025, PAT included profit on sale of investments and surplus land of โ‚น199.4 cr (after consolidation adjustments) and profit on sale of investment and surplus land amounting, which was accounted as exceptional item. In FY24, the PAT stood at โ‚น394 cr. There was an increase in finance cost & depreciation on account of commissioning of units in JPM Line III, Kolimigundla, R RNagarLine III and Dry Mortar Plants.
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#EBITDA #MARGIN

In FY25, EBITDA margin contracted by 222 bps YoY to 14.5%, this was on the back of reduced realisation along with a 109 bps YoY reduction in gross margin, which stood at 32.5%. Furthermore, employee cost as a percentage of net revenue from operations increased by 59 bps YoY to 6.5%; logistics cost increased by 209 bps YoY to 24.3% and other expenses increased by 53 bps YoY to 11.6%. However, power and fuel cost decreased by 209 bps YoY to 24.3%. Average lead distance during the year was 260 km v/s 280 km in FY24 and rail share of cement dispatches was ~9%, an increase of 100 bps YoY. In FY24, the EBITDA margin 16.7% v/s 14.5% in FY23. Decreasing fuel and power cost led to an positive impact on the EBITDA margins, Higher demand during the year led to higher plant capacity utilization which led to higher operating leverage.
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#PAT #MARGIN

For the year ended 31st March 2025, PAT margin was 3.1%, it contracted by 105 bps YoY. Effective tax rate during the period was lower to 16% due to deferred tax expense, however there was zero current tax liability. In FY24, the PAT margin remained flat on a YoY basis at ~4.2%. Effective tax rate during the year was ~27% as against 28% in FY23.
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#ROCE

In FY25, return on capital employed is envisaged to reduce due to reduced profitability lead by a weak demand environment. In FY24, the EBIT stood at โ‚น958 cr and capital employed was at โ‚น12,298 cr. EBIT increased by ~34% and during the same period increase in capital employed was ~7% due to which the ratio improved by ~164 bps on aYoYbasis to 8.2%.
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#ROE

As on 31st March 2025, net worth increased by 3% YoY to โ‚น7,442 cr and net profit decreased by 32% YoY to โ‚น268 cr. For the year under review, ROE is anticipated to be ~3.7% due to reduced profitability and asset turnover ratio. In FY24, the net worth was at โ‚น7,238 cr and the net profit stood at โ‚น394 cr. The ratio registered a slight increase from 5.07% in FY23 to ~5.6% in FY24. Increase in ROE was due to higher financial leverage and marginally better asset utilization.
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#COMPANY #POTENTIAL

โ€ข India is the second largest producer and consumer of cement, with a capacity of ~670 MTPA. The industry is an essential contributor to the Indian economy, providing employment to millions of people and driving infrastructure development. As per Crisilโ€™s estimate, Indian cement companies expanded its capacity by 33-35 MT in FY25. (Source : CRISIL Research) โ€ข Indiaโ€™s per capita cement consumption is 250 kg, far below Chinaโ€™s 1,600 kg, offering substantial growth potential. Cement demand inIndia is expected to grow 1.2x to 1.5x of GDP. In FY26, Indiaโ€™s GDP is envisaged to grow at ~6.5%. โ€ข InSouthern region, during the first two months of FY26, the average cement prices improved by โ‚น30-โ‚น35 per bag in trade and โ‚น60โ‚น70 per bag in non-trade. In the eastern region, trade price remain flat whereas non-trade price improved by around โ‚น10 per bag from the exit prices of March 2025. The management believes the prices would sustain amid rising pace of cement capacity additions/consolidation in Southern region. โ€ข In the FY26 Budget, allocation for capex is at โ‚น11.2 lakh cr besides โ‚น1.5 lakh crore as 50-year interest-free loans to states for infrastructure development. Personal income tax reductions is also expected to boost consumption. Industrial activity is expected to rebound on the back of higher government spending. Normal monsoon predictions could boost farm incomes, driving demand for rural housing. Urban housing is expected to regain momentum, owing to a low base, interest rate cuts and improved pace of execution under Pradhan Mantri Awas Yojanaโ€“ Urban. The government has allocated ~โ‚น78,000 crore towards PM Awas Yojana in FY26. โ€ข In February 2025, Government of Tamil Nadu (TN) increased royalty on limestone to โ‚น160 per tonne. Ramco Cement produced ~50% of its clinker (key raw material limestone) in TN, resulting in additional cost implication of ~โ‚น200 per tonne of cement produced in TN.

โ€ข TheBharatmala projectโ€“ The government has set a target to lay down 60,000 kms of road with a total outlay of โ‚น6.9 lakh crore out of which 34,800 km are targeted in Phase 1. Till March 2024, road projects spanning 17,411 km have been built under Phase 1. As of FY24, out of a total length of 34,800 km (Bharatmala Phase I), 27,391 km have been awarded (including approved but not awarded), 17,411 km have been constructed and total capital outlay has been โ‚น8.75 lakh crore. โ€ข Government of Indiaโ€™s National Infrastructure Pipeline (NIP), decade of infrastructure, ~$4 trillion investment expected. Highways (~15,000 km/year), ports, bullet trains, rail/metro, renewables will push the demand.
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#COMPANY #OUTLOOK

โ€ข In Kolimigundla, construction of railway siding is complete, and commissioning is under progress. The siding is expected to be available for usage during Q1 FY26. โ€ข Thecapacity expansion of construction chemicalโ€™s unit in Odisha is expected to be commissioned before June 2025. โ€ข Thecompanypropose to double the clinker capacity in Kolimigundla to 6.3 MTPA and double the cement capacity to 3 MTPA with 15 MWofWHRSatanestimated project cost of โ‚น1,250 cr. This expansion is scheduled to be commissioned in FY26. The aggregate installed capacity of company would reach 19 MTPA for clinker and 30 MTPA for cement by FY26. Along with the ongoing capex they will also look for opportunities to de-bottleneck existing facilities and adding grinding capacities in existing locations with nominal capex. โ€ข It have proposed to install waste heat recovery system (WHRS) plant with a capacity of 10 MW in Ramasamy Raja Nagar at an estimated cost of โ‚น153 cr and is scheduled for commissioning by July 2025. In Kolimigundla, WHRS capacity of 15 MW will be commissioned along with Kiln Line-2, thaking the total WHRS capacity to 68 MW by FY26. The total green power capacity as on 31st March 2025 was 211 MWandwillbe236 MWbytheendFY26. โ€ข Thecompanyhasso faracquired 54% of mininglandand 13% of factory lands for green field project in Karnataka. โ€ข During FY25, the company has monetized โ‚น460 cr out of targeted value of โ‚น1,000 cr towards disposal of non-core assets. The company will use the said proceeds to reduce its debt and to meet its capex requirements. The company is on track to achieve the target before July 2025 as committed earlier.
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The Ramco Cements Limited 880-925
Expected level 1100
Support 800
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DOMS Industries company details report

DOMSโ€™ consol sales grew by c.25% with organic sales growth of c.17% (tad lower vs its guidance of 18-20%). However, this was predominantly driven by capacity constraints (no major capacity addition happened in scholastic stationary/art material in FY25 & some delay in construction activities) and demand has not been a challenge. With addition of lines (for pens, pencil processing, paper stationary, etc.) in existing infrastructure and new greenfield capacities coming up from end of FY26, the supply side challenges should ease. This apart, DOMS has been widening its portfolio (launch of back to school range, DOMS tots range, adhesives, fine arts, paper stationary), which we believe should enable it to achieve organic revenue growth guidance of c.18-20% p.a. over medium term. EBITDA margins are likely to be within guided range of 16.5-17.5%, as focus remains on increasing market share. Going ahead pace of commissioning of new capacities will be key for acceleration in writing instruments. Execution on Paper stationary & Uniclan business (distribution expansion) over medium term will be another key monitorable. We like DOMS brand strength, R&D capabilities, fully backward integrated manufacturing setup and promoterโ€™s ability to leverage these tools to create new growth engines and get product & pricing right. This we believe will enable it to continue outperforming industry growth
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Widening portfolio & creating new growth engines leveraging its innovation/R&D expertise:

One of the key strengths of DOMS has been its innovation capabilities in the stationary segment and it continues to remain agile in this aspect โ€“ visible from launch of Tots range, widening of its Pens portfolio, launch of back to school range (bags), value added offerings in kits & combos, adhesives range, markers, mechanical pencils & fine art products. DOMSโ€™ R&D and backward integration strength to provide a value for money offering has been instrumental in creating newer growth opportunities, gaining market share in core categories & outperforming peers in stationary segment.
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Pencils & Pens Production capacity
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Peer Comparison Revenue growth
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Capacity expansion to ease supply challenges and drive organic growth:

Core stationary segment growth saw some moderation in 4QFY25 vs historical trends โ€“ this in our view was primarily driven by capacity constraints (currently at c.90% utilization for core categories) and not any demand side issues. Historically too, capacity has been a challenge for DOMS & it has been investing behind adding lines across categories. Apart from expanding at the existing infrastructure (from 22 acres to 26-27acres, added injection molding machines for pens), the construction of 44 acre greenfield capacity is also under progress (first building to commercialize in Mar/Aprilโ€™26). Overall capex for greenfield project is c.INR 10bn (INR 2.2-2.3bn p.a in FY26/27E) & in normalized scenario, the asset turn achievable in this business is c.3x. Phase wise capacity expansion is being undertaken in core categories in FY26 โ€“ Pencils (from 5.5mn pencils/day to 8 mn/day), Pens (from 2.2 mn pens/day to 3.2-3.5mn pens/day by Marโ€™26) and Paper stationary (new line added in Pioneer & acquisition of Super tread). This we believe should ease supply challenge which along with continued innovation intensity across categories should help achieve its organic sales growth guidance
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Enough headroom to scale up in Pens; well placed to capitalize on opportunity with capacity & portfolio in place:

DOMSโ€™ has clear demonstrated its execution capabilities (sales up 3.5x over FY23-25, accounting for c.7% of gross stationary sales) in a competitive and large category (market size of INR 100bn) like Pens. Company had entered this category around two years back, when key industry players decided to exit INR 5 price point. DOMS saw this as an opportunity to enter a large category, leveraged its strong R&D capabilities and created superior product offering at a value for money price point (for e.g.: Gel pen at INR 5). The range has been well accepted, visible from its strong growth in this segment. Also, despite majority range being at INR 5, the profitability in this segment is similar to company level margins. Moreover, headroom for growth remains immense - DOMSโ€™ pens are still not launched pan-India (present only in c.50% of the market) and market share is still in low single digits. With capacities getting added (3.2-3.5mn pens/day by Marโ€™26 & aspiration to reach 10mn in another 2 years), we expect strong traction in this category to continue & it will remain one of the key revenue drivers for DOMS over medium term.
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Paper stationary โ€“ Capacity additions to help tap large TAM:

Segment offers large growth opportunity (market size of INR 100 bn with DOMSโ€™ market share in low single digits). DOMS entered in this segment through acquisition of Pioneer stationary Ltd in FY16. Over the years, revenue has scaled significantly from INR 45 mn to INR 1.6bn (in FY24) โ€“ led by a combination of category expertise of existing promoters of Pioneer and DOMSโ€™ brand/distribution strength. While business margins are lower & entails higher working capital (higher credit period) vs conventional stationary products, the TAM is much larger to be ignored. Also, focus here is more on kids/back to school products where it has right to win and can leverage its brand & distribution strength. Capacities have been added in Pioneer (20% increase in Octโ€™24); recent acquisition of Super Treads (West Bengal based paper manufacturing entity) will further increase overall capacity by another 30% and also enable to widen geographic presence in a more cost efficient manner.
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Strengthening distribution infrastructure:

Apart from working on portfolio and capacity expansion, DOMS has also been focusing on expanding & driving efficiencies in its distribution. Currently, it has total reach of 140k stationary outlets with direct reach to 125k outlets. It plans to reach at least 175-200k outlets directly over the medium term & balance universe (another 100-150k) will be served through wholesale channel. This apart, in order to increase thruput per store, DOMS has increased its sales team strength & created separate sales lines โ€“ existing sales team continuing with core stationary products and additional sales line for its new product segments which are Pens, Paper stationary, and Adhesives. Also, to ensure better visibility on secondary sales, it is onboarding c.30% of distributors (which account for large part of its sales) onto DMS system.
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