Ramco Cements Hit by Tamil Nadu’s New Mining Tax, Cost Pressures Rise

17 Mar 2025 CW Team

With nearly half of its clinker capacity located in Tamil Nadu, Ramco is expected to be the most affected among its listed peers. A Kotak Institutional Equities report on March 12 highlighted that Ramco’s regional concentration puts it at a disadvantage compared to competitors like Dalmia Bharat, UltraTech Cement, and Ambuja Cements, which have significantly lower exposure to the state. As a result, Kotak has cut Ramco’s EBITDA estimates for FY26 and FY27 by 5% and 4%, respectively, due to higher costs.

The tax hike comes at a time when margin tailwinds for the cement sector are fading. The cost of petroleum coke, a key fuel, has started rising, further squeezing profitability. While cement makers across India are impacted, Ramco is particularly vulnerable. According to Elara Securities (India), Ramco’s EBITDA per tonne declined by Rs 56 to Rs 653 in Q3FY25, even as its peers saw sequential growth, reflecting weak pricing conditions in the southern market.

Although companies may try to pass on the added costs to consumers, pricing trends in South India remain unfavourable. Overcapacity and intense competition—driven by increased mergers and acquisitions—have kept price hikes in check, as larger players prioritize volumes over margins.

Despite these challenges, Ramco is continuing its expansion, aiming to increase clinker and grinding capacity to 30 million tonnes per annum (mtpa) by FY26 from the current 24 mtpa. The company is also reducing debt by monetizing non-core assets. While improving market conditions in South India could provide some relief, Ramco’s stock remains under pressure, trading at an elevated EV/EBITDA multiple of around 14 times based on FY26 estimates, according to Bloomberg.

(Mint)

The Ramco Cements Ltd faces a fresh challenge as Tamil Nadu introduces a new mineral-bearing land tax under the Tamil Nadu Mineral Bearing Land Tax Act 2024. Effective February 20, the state government has imposed a levy of Rs 160 per tonne on limestone, payable in advance upon dispatch. This tax adds to the existing royalty on limestone mining, further increasing costs for cement manufacturers operating in the region. With nearly half of its clinker capacity located in Tamil Nadu, Ramco is expected to be the most affected among its listed peers. A Kotak Institutional Equities report on March 12 highlighted that Ramco’s regional concentration puts it at a disadvantage compared to competitors like Dalmia Bharat, UltraTech Cement, and Ambuja Cements, which have significantly lower exposure to the state. As a result, Kotak has cut Ramco’s EBITDA estimates for FY26 and FY27 by 5% and 4%, respectively, due to higher costs. The tax hike comes at a time when margin tailwinds for the cement sector are fading. The cost of petroleum coke, a key fuel, has started rising, further squeezing profitability. While cement makers across India are impacted, Ramco is particularly vulnerable. According to Elara Securities (India), Ramco’s EBITDA per tonne declined by Rs 56 to Rs 653 in Q3FY25, even as its peers saw sequential growth, reflecting weak pricing conditions in the southern market. Although companies may try to pass on the added costs to consumers, pricing trends in South India remain unfavourable. Overcapacity and intense competition—driven by increased mergers and acquisitions—have kept price hikes in check, as larger players prioritize volumes over margins. Despite these challenges, Ramco is continuing its expansion, aiming to increase clinker and grinding capacity to 30 million tonnes per annum (mtpa) by FY26 from the current 24 mtpa. The company is also reducing debt by monetizing non-core assets. While improving market conditions in South India could provide some relief, Ramco’s stock remains under pressure, trading at an elevated EV/EBITDA multiple of around 14 times based on FY26 estimates, according to Bloomberg. (Mint)

Infrastructure Urban

13 Oct 2025

Daikin Boosts Haryana’s Innovation Push with Rs 10 billion R&D Plan

Japanese multinational Daikin Industries has committed an investment of Rs 10 billion to set up a new research and development centre in Haryana. The proposed facility will focus on advanced technologies and sustainable industrial solutions, marking a significant boost to the state’s innovation and industrial ecosystem. The announcement follows the signing of a Memorandum of Understanding (MoU) in Osaka, Japan, during a visit by a Haryana government delegation held from October 6 to 8. The MoU was signed by Amit Kumar Agrawal, Commissioner and Secretary, Industries and Commerce Department, ..

Building Material

13 Oct 2025

Lloyds Metals to Build Rs 250 billion Steel Plant in Gadchiroli

Lloyds Metals & Energy Limited (LMEL) has announced an investment of Rs 250 billion aimed at transforming Gadchiroli in Maharashtra from a region once associated with the red corridor into a key industrial and growth hub. The company’s plans are centred on establishing an integrated steel production ecosystem, which will contribute significantly to regional development and employment. As part of its expansion strategy, LMEL is setting up a 4.5-million-tonne blast furnace in Gadchiroli, scheduled for completion by 2027–28, along with another 1.2-million-tonne facility in Chandrapur by 2029..

Infrastructure Urban

13 Oct 2025

UPI Crosses 500 Million Users, Fuels MSME and Digital Growth

The Unified Payments Interface (UPI) has achieved a new milestone, surpassing 500 million consumers and 65 million merchants across India. The platform, developed by the National Payments Corporation of India (NPCI), has expanded its reach to nearly 99 percent of the country’s pin codes, underlining its deep penetration into both urban and rural markets. According to a report by NPCI and the Boston Consulting Group (BCG) launched during the Global Fintech Fest 2025, UPI has evolved from being a digital payments mechanism into a key enabler of financial inclusion and small business growth. I..