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)

"Join industry leaders at RAHSTA Expo, India's premier platform for roads, highways and traffic infrastructure. Register now to explore innovations, network with experts and shape the future of mobility."

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

06 Jul 2026

ABS Marine Sees CRISIL Credit Rating Upgrade

ABS Marine Services has secured an upgrade to its long term and short term credit ratings from CRISIL, reflecting improved profitability and revenue growth through long term contracts. CRISIL moved the long term rating from BBB+/Stable to A-/Stable and revised the short term rating from A2 to A2+. The action signals strengthened financial metrics and operational resilience. The company benefited from durable client relationships with firms such as ONGC and Schlumberger. The rating decision followed stronger cash flows and an enlarged bank loan facility, which increased from Rs 3,705 million (m..

Infrastructure Transport

06 Jul 2026

Project BRAHMANK Marks 16 Years Of Strategic Roads In Arunachal

Project BRAHMANK is marking 16 years of work to establish strategic road and bridge links across Arunachal Pradesh, maintaining and developing 811 kilometres of roads and nearly 86 bridges that range from small culverts to large steel and arch bridges. These transport links are described as critical for ensuring year-round movement of defence personnel, equipment and essential supplies while improving everyday travel for people in remote villages. The project balances national security requirements with regional development by focusing on reliable access in challenging terrain. Notable enginee..

Infrastructure Transport

06 Jul 2026

Longleng CSOs Give One Week Ultimatum Over Two-Lane Highway

Civil society organisations (CSOs) in Longleng district have demanded immediate restoration of the deteriorating Changtongya–Longleng two-lane road and sought a detailed status report on the stalled construction within one week. The demand followed a consultative meeting convened under the Phom Peoples' Council (PPC) to discuss welfare and development concerns. PPC president YB Angam Phom said prolonged non-maintenance had caused hardship to commuters and affected transportation, local commerce and the district's development. The meeting urged authorities to undertake immediate restoration a..