In Short:
Ramco Cements Ltd plans to invest ₹1,200 crore in the current fiscal year and sell non-core assets worth ₹1,000 crore. Their Q1 FY25 net profit decreased by 55% due to lower revenue and EBITDA, despite a slight increase in cement sales. Input costs have gone up, but power and fuel costs have decreased. The company aims to expand its cement capacity to 30 mtpa by March 2026.
The Ramco Cements Ltd’s Big Plans for the Current Fiscal Year
Exciting news from The Ramco Cements Ltd! They have announced a massive capital expenditure (capex) of ₹1,200 crore for the current fiscal year. But that’s not all – they also have plans to monetise some non-core assets worth ₹1,000 crore within the next year. Impressive, right?
Big Goals for Cement Capacity
By March 2026, Ramco Cements is aiming for a cement capacity of 30 million tonnes per annum. How? Well, they plan to commission the second line in Kolimigundla, de-bottleneck existing facilities, and add grinding capacities in existing locations with minimal capex. That’s some serious growth strategy!
A Bump in the Road: Q1 Net Profit Plummets
Despite these grand plans, the company reported a 55% drop in net profit to ₹35.5 crore for the quarter ended June 30, 2024. The blame? A decline in revenue and EBITDA, even with a slight increase in cement sales.
In Q1 of this fiscal year, Ramco Cements saw a growth in cement sales to 4.36 million tonnes, but net revenue still dropped by 7%. EBITDA for the quarter decreased by 6% to ₹328 crore. Tough times, indeed.
Dealing with Input Costs
Raw material costs increased by 9% year-on-year, hitting ₹990 per tonne due to inflationary impacts on procurement costs. The good news? Power and fuel costs per tonne of cement actually decreased to ₹1,300. Plus, the shift to using wind power for captive use helped reduce overall power costs.
While interest costs and depreciation were higher, mainly due to new manufacturing facilities commissioned in the previous year, Ramco Cements is still pushing forward with their growth plans.
Exciting times ahead for The Ramco Cements Ltd as they forge ahead with their expansion and monetisation plans. Stay tuned for more updates!
