Ramco Cements sets ₹1,200 crore capex for FY26, progressing on ₹1,000 crore asset monetisation

The Ramco Cements Ltd has announced a capital expenditure (capex) plan of ₹1,200 crore for the next fiscal year, maintaining the same guidance it had provided for FY25. The company has also raised ₹443 crore in this fiscal through the sale of non-core assets.

During Q3 of this fiscal, the company incurred a capex of ₹256 crore, bringing the total capex spending for the first nine months to ₹800 crore. Ramco Cements has set a target of monetising ₹1,000 crore worth of non-core assets and has so far realised ₹443 crore. An additional ₹10 crore has been received as advances for assets in the final stages of sale. “The company is on track to achieve the target as committed earlier,” it said.

The funds from asset sales have been used to reduce debt, with the company’s net debt standing at ₹4,616 crore as of December 31, 2024. During Q3FY25 alone, the company reduced its debt to the extent of ₹487 crore.

Expansion plans

Ramco Cements remains on track to achieve a cement production capacity of 30 MTPA by March 2026. This expansion includes the commissioning of a second production line in Kolimigundla, alongside capacity enhancements through de-bottlenecking and adding grinding facilities. Additionally, a railway siding at Kolimigundla is scheduled for commissioning in March 2025.

A 10 MW Waste Heat Recovery System (WHRS) at RR Nagar, is expected to be operational by June 2025, while a 15 MW WHRS unit at Kolimigundla, is set to be commissioned alongside Kiln Line-2 by March 2026. The new unit for construction chemicals in Odisha is expected to be commissioned before March 2025. The company has so far acquired 53 per cent of mining land and 13 per cent of factory lands for the greenfield project in Karnataka.

Exceptional income

For Q3FY25, the company posted a profit after tax of ₹325 crore when compared with ₹93 crore in the year-ago period. This was largely driven by exceptional income of ₹329 crore from the sale of investments and surplus land.

Net revenue for Q3FY25 stood at ₹1,988 crore against ₹2,113 crore during Q3FY24 with a de-growth of 6 per cent due to a drop in cement prices by around 14 per cent year-on-year.

The total sale volume (including construction chemicals) stood at 4.37 million tonnes, compared to 4 million tonnes in Q3FY24 with a growth of 9 per cent. The cement capacity utilisation has increased marginally to 75 per cent in Q3FY25 from 74 per cent in Q3FY24.

EBIDTA was lower at ₹291 crore as against ₹402 crore in the year-ago period, a decline of 28 per cent. Revenue and margins were affected because of weak cement prices despite cost reduction due to the softening of fuel prices and improvement in manufacturing efficiency.