Ramco Cements , a leading player in the Indian cement industry, has reported a significant increase in profitability for the first quarter, despite a marginal decline in revenue. The company's financial results showcase its resilience and operational efficiency in a challenging market environment.

Financial Highlights

• Net Profit: The company's net profit surged to ₹860.00 million, marking a substantial 142% increase from ₹355.00 million in the same period last year.
• Revenue: Total revenue slightly decreased to ₹20.70 billion, down from ₹20.88 billion year-over-year, representing a marginal decline of 0.86%.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) improved to ₹3.98 billion, up from ₹3.19 billion in the corresponding quarter of the previous year.
• EBITDA Margin: The EBITDA margin expanded significantly to 19.23% from 15.30% in the prior year period, indicating improved operational efficiency.

Operational Performance

Ramco Cements' operational performance during the quarter includes:

• Cement Sales Volume: 4.00 million tons, compared to 4.29 million tons in the same quarter last year, representing a 6.76% decrease.
• Capacity Utilization: Decreased to 68% from 77% in the previous year, partly due to weak demand and additional capacities created through debottlenecking.
• Construction Chemicals: This business segment showed strong growth, with sales volume increasing to 1.20 lac tons from 0.67 lac tons, a 79.10% year-on-year growth.

Factors Affecting Performance

1. Demand Challenges: Early monsoon rains in Kerala and the completion of many infrastructure projects in eastern markets impacted cement demand.
2. Pricing Improvement: Despite lower volumes, improved cement prices contributed to the profitability boost.
3. Cost Management: The company managed to reduce power and fuel costs per ton of cement from ₹1,300.00 to ₹1,222.00.
4. Raw Material Costs: Increased by 7% year-on-year, partly due to the new Mineral Bearing Land Tax in Tamil Nadu.

Strategic Initiatives

• Capacity Expansion: Ramco Cements aims to achieve a cement capacity of 30 MTPA by March 2026, including the commissioning of a second line in Kolimigundla.
• Green Energy: Plans are underway to commission additional Waste Heat Recovery System (WHRS) capacities, enhancing the company's focus on sustainable energy sources.
• Non-Core Asset Disposal: The company has monetized ₹501.00 crores out of a targeted ₹1,000.00 crores in non-core assets, with the remainder expected to be completed by September 2025.

Management Commentary

M.F. Farooqui, Chairman of Ramco Cements, stated, "Our focus on operational efficiency and strategic pricing has enabled us to deliver strong profit growth despite challenging market conditions. The significant improvement in our EBITDA margin reflects our ability to manage costs effectively while maintaining product quality."

Outlook

While Ramco Cements faces short-term challenges due to market conditions and regulatory changes, the company's strategic initiatives and focus on operational efficiency position it well for future growth. The expansion of capacity, investment in green energy, and strong performance in the construction chemicals segment are expected to drive long-term value for shareholders.

Investors and analysts will be watching closely to see how Ramco Cements navigates the evolving market dynamics and capitalizes on infrastructure growth opportunities in the coming quarters.

Ramco Cements , a prominent player in the Indian cement industry, has marked a significant milestone in its growth strategy by inaugurating its fifth construction chemical plant in Odisha. This latest addition to the company's manufacturing capabilities underscores its commitment to expanding its presence in the construction chemicals sector.

New Plant Details

The new facility is located within the premises of Ramco Cements' existing cement grinding unit at Haridaspur Village, Jajpur District, Odisha. This strategic location is expected to strengthen the company's ability to serve the Eastern markets more effectively.

Expanding Capacity

With the addition of this new plant, Ramco Cements has boosted its total installed capacity for construction chemicals to 5.00 lakh tonnes per annum. This expansion represents a substantial increase in the company's manufacturing capabilities and positions it as a significant player in the construction chemicals market.

Strategic Growth

The establishment of the Odisha plant aligns with Ramco Cements' broader strategy to diversify its product portfolio and capture a larger share of the construction materials market. By focusing on construction chemicals, the company is tapping into a high-growth segment that complements its core cement business.

Railway Siding Project

In a related development, Ramco Cements has also completed a private railway siding project at its integrated cement plant in Kalavatala Village, Kolimigundla Mandal, Nandyal District, Andhra Pradesh. The project includes:

• A track length of approximately 23 kilometers
• A wagon tippler equipment
• Operational clearance from Railway Authorities

The company has already commenced cargo movement using this new railway siding, which is expected to enhance logistics efficiency and reduce transportation costs.

Market Impact

The expansion into construction chemicals and the improvement in logistics infrastructure demonstrate Ramco Cements' commitment to growth and operational efficiency. These strategic moves are likely to strengthen the company's market position and potentially lead to improved financial performance in the coming quarters.

As Ramco Cements continues to expand its footprint in the construction materials sector, investors and industry observers will be keen to see how these new capabilities translate into market share gains and financial results.