The Ramco Cements Ltd Upgraded to Hold by MarketsMOJO on Technical and Financial Improvements

Technical Trend Shift Spurs Upgrade

The primary catalyst behind the upgrade to a Hold rating is the marked improvement in the stock’s technical profile. The technical grade has shifted from mildly bullish to bullish, supported by a confluence of positive signals across multiple indicators. On the weekly and monthly charts, the Moving Average Convergence Divergence (MACD) is firmly bullish, signalling sustained upward momentum. Similarly, Bollinger Bands on both weekly and monthly timeframes have turned bullish, indicating increased volatility in favour of price appreciation.

Daily moving averages also confirm this positive trend, with the stock price currently trading at ₹1,063.80, up 1.05% from the previous close of ₹1,052.75. The KST (Know Sure Thing) indicator is bullish on both weekly and monthly scales, reinforcing the momentum. While the Relative Strength Index (RSI) remains neutral with no clear signal, the On-Balance Volume (OBV) indicator shows a bullish trend on the monthly chart, suggesting accumulation by investors.

Despite a mildly bearish Dow Theory signal on the weekly chart, the monthly Dow Theory reading is mildly bullish, indicating that the longer-term trend remains positive. This technical backdrop has been instrumental in the upgrade decision, as it points to a strengthening price action that could attract further investor interest.

Financial Trend: Mixed Signals but Recent Growth Encouraging

Financially, The Ramco Cements Ltd has delivered a mixed performance over the long term but showed encouraging signs in the recent quarter. The company reported a Profit Before Tax (PBT) excluding other income of ₹93.29 crores for Q2 FY25-26, representing a remarkable growth of 278.00% year-on-year. Additionally, the Profit After Tax (PAT) for the latest six months stood at ₹162.37 crores, signalling improved profitability in the near term.

However, the longer-term financial trend remains a concern. Operating profits have declined at a compound annual growth rate (CAGR) of -5.22% over the past five years, reflecting underlying challenges in sustaining earnings growth. Furthermore, the company’s ability to service debt is limited, with a high Debt to EBITDA ratio of 3.42 times, indicating elevated leverage risk.

Return on Equity (ROE) averaged 6.62%, which is relatively low and suggests modest profitability per unit of shareholder funds. Return on Capital Employed (ROCE) is also subdued at 5.4%, while the enterprise value to capital employed ratio stands at 2.4, pointing to an expensive valuation relative to the company’s capital base.

Valuation and Market Performance

Despite the expensive valuation metrics, The Ramco Cements Ltd is currently trading at a discount compared to its peers’ historical averages. The stock price has shown resilience, with a 52-week high of ₹1,206.60 and a low of ₹788.75. Over the past year, the stock has generated a return of 19.79%, significantly outperforming the Sensex’s 8.61% return during the same period. Over three years, the stock’s cumulative return of 63.25% also surpasses the Sensex’s 37.97%, underscoring its market-beating performance.

Shorter-term returns are positive as well, with a 0.82% gain year-to-date compared to a 3.95% decline in the Sensex. The stock’s one-week return of 0.57% contrasts favourably against the Sensex’s 0.39% loss. These figures highlight the stock’s relative strength amid broader market volatility.

However, it is important to note that profits have fallen by 32.9% over the past year, which tempers enthusiasm and suggests caution. The stock’s current Mojo Score is 51.0, placing it in the Hold category, upgraded from a previous Sell rating as of 27 January 2026. The Market Cap Grade is 3, reflecting a mid-tier market capitalisation status within the cement sector.

Quality Assessment and Institutional Confidence

The Ramco Cements Ltd’s quality rating remains moderate. Institutional investors hold a significant 39.51% stake in the company, indicating confidence from well-resourced market participants who typically conduct thorough fundamental analysis. This institutional backing lends credibility to the company’s prospects despite some fundamental weaknesses.

Nonetheless, the company’s long-term fundamental strength is weak, as evidenced by declining operating profits and low returns on equity and capital employed. These factors limit the stock’s appeal for investors seeking robust growth and profitability metrics.

Technical Outlook and Market Sentiment

The technical upgrade reflects a shift in market sentiment towards The Ramco Cements Ltd. The bullish signals across MACD, Bollinger Bands, KST, and moving averages suggest that the stock is gaining momentum and may continue to trend higher in the near term. The absence of strong RSI signals indicates that the stock is not yet overbought, leaving room for further upside.

Volume-based indicators such as OBV showing bullish trends on the monthly chart imply that buying interest is increasing, which could support sustained price appreciation. The mild bearishness on the weekly Dow Theory reading is outweighed by the monthly mildly bullish signal, suggesting that any short-term corrections may be temporary.

Overall, the technical landscape supports the Hold rating, signalling that investors should monitor the stock closely for further confirmation of a sustained uptrend before considering a more aggressive stance.

Conclusion: Balanced Outlook Warrants Hold Rating

The upgrade of The Ramco Cements Ltd to a Hold rating is justified by a combination of improved technical momentum and encouraging recent financial results. The stock’s market-beating returns over one and three years further support this positive reassessment. However, the company’s weak long-term fundamental growth, high leverage, and expensive valuation metrics temper the outlook and preclude a Buy rating at this stage.

Investors should weigh the stock’s technical strength and institutional backing against its fundamental challenges. The Hold rating reflects a cautious optimism, suggesting that while the stock is no longer a sell, it requires further improvement in financial trends and valuation before it can be considered a strong buy.

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