Prism Johnson down 6% on 1,420-acre land transfer to Ramco Cements

The shares of Prism Johnson experienced a 6% decline, falling to Rs 124.75 on the BSE. This occurred after the board gave approval for the transfer of certain freehold land parcels, totaling 1,420 acre in the villages of Nandyal, Andhra Pradesh (AP), to Ramco Cements. Additionally, the company decided to transfer a mining lease, covering an area of 663.46 hectare, which had been granted by the government, to Ramco Cements. Prism Johnson had initially purchased these land parcels, which contain limestone, with the intention of establishing a new cement manufacturing plant. However, due to a mismatch between their current interests and investment plans, they made the decision to transfer both the land parcels and the mining lease to Ramco Cements. According to Prism Johnson's statement in the exchange filing, once the definitive agreements are executed with Ramco Cements and the specified conditions are met, the transfer of the mining lease and land parcels will be completed. The expected completion date for this transaction is July 31, 2023, subject to any customary approvals that may be required. Prism Johnson is a prominent building materials company in India that operates through three divisions: Cement (Prism Cement), H & R Johnson (India) (HRJ), and RMC (India) (Prism RMC). The company mentioned that the increase in input costs, particularly fuel, pet-coke, and coal prices, had a negative impact on profitability margins in the 2022-23 period. In response to this, Prism Cement focused on cost optimization efforts throughout the past year. The company anticipates that the impact of these efforts will become evident from the following year. Prism Cement is planning to commission wind power by September 2024. This move is aimed at reducing the overall power cost for the cement plant in Satna and increasing the utilization of renewable energy. Considering the potential growth in the medium-term market, HRJ intends to increase its tile manufacturing capacity by 5.5 million. This expansion will be accomplished through a Greenfield project in Panagarh, West Bengal, which is expected to be finished in the first half of the 2023-24 period. By doing so, HRJ aims to enhance its presence in the Eastern region and gain a larger market share. The management also stated that Prism RMC is well-positioned to benefit from the expected recovery in demand within the Real Estate and Infrastructure sectors in the medium-term. The business has gained momentum as it secured additional infrastructure projects that are scheduled for execution over the next two to three years, which will contribute to revenue growth. Also read: Shree Cement starts trial production of greenfield plant Ramco commissions new line at Ramasamy Raja Nagar plant