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The Ramco Cements Ltd has announced a capex of ₹1,200 crore for the current fiscal and plans to monetise some non-core assets worth ₹1,000 crore within the next year. In Q1 FY25, the company incurred ₹281 crore towards capex, including maintenance capex. The total capex guidance for FY25 is projected at ₹1,200 crore. The company is taking effective steps to monetise certain non-core assets worth about ₹1,000 crore over the next 12 months, according to a statement.
By March 2026, Ramco Cements aims to achieve a cement capacity of 30 mtpa by commissioning the second line in Kolimigundla, de-bottlenecking existing facilities, and adding grinding capacities in existing locations with minimal capex.
Q1 net plummets
The Chennai-headquartered company reported a 55 per cent drop in its net profit to ₹35.5 crore for the quarter ended June 30, 2024 compared to a net profit of ₹78.91 crore in the same quarter last year, due to a decline in revenue and EBITDA despite marginal growth in cement sales.
The company’s cement sales grew to 4.36 million tonnes (3.40 million tonnes) on weak demand amid general elections. Net revenue reported a decline of 7 per cent at ₹2,097 crore in Q1 of this fiscal on the back of a drop in cement prices by about 8 per cent. EBITDA for the June 2024 quarter decreased by 6 per cent to ₹328 crore. Blended EBITDA per tonne was ₹752, down from ₹812.
Input costs
The cost of raw materials increased by 9 per cent year-on-year to ₹ 990 per tonne due to inflationary impacts on procurement costs. In Q1 of this fiscal, the blended fuel consumption per tonne for cement was equivalent to $137 (cost per Kcal: ₹1.49) compared to $170 (cost per Kcal: ₹2.03) in Q1 FY24.
However, the power and fuel cost per tonne of cement decreased to ₹1,300 from ₹1,758. The shift in the utility of wind power to captive use also helped reduce the overall power cost. Overall green power usage improved to 33 per cent in Q1 FY25 from 29 per cent in Q1 FY24 due to this change.
Interest cost and depreciation were higher at ₹113 crore (₹93 crore) and ₹167 crore (₹148 crore), respectively, mainly due to the commissioning of new manufacturing facilities during the previous year. Profit before tax stood at ₹48 crore, down from ₹108 crore.
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