Ramco Cements 1QFY27: Revenue up, margins squeezed by fuel and state levies

The Ramco Cements Limited reported a topline increase in 1QFY27, but profitability fell sharply as higher energy and packing costs, plus a state levy on limestone, weighed on margins. Standalone revenue rose to 2,276.18 crores from 2,076.61 crores in 1QFY26, a 10% increase. EBITDA declined to 314.38 crores from 404.12 crores, while profit after tax dropped to 31.86 crores from 86.01 crores.

The quarter played out against a mixed macro backdrop. India’s real GDP growth moderated in projections for FY27, inflation edged higher, and rupee depreciation increased imported input costs. At the same time, cement production growth remained strong, supported by infrastructure and government capex. The company flagged risks from the West Asia conflict and the potential impact on fuel, freight, insurance, and commodity prices.

Volumes improved, but demand disruptions and mix shifts shaped the quarter

Operationally, the company disclosed that total sale volume increased 12% year on year, but fell 17% quarter on quarter, citing demand disruptions due to state elections in Tamil Nadu, Kerala, and West Bengal. Capacity utilization improved slightly to 70% in 1QFY27 from 68% in 1QFY26, but was well below 4QFY26 levels of 83%.

In the South, volumes from both B2C and B2B grew year on year, but the region’s volume share declined to 73% from 79% in 1QFY26. Premium products contributed 28% of the South mix, marginally lower than the prior year. Trade prices in the South increased 5% from the March 2026 exit price.

In the East, volumes also grew year on year and the region’s volume share increased to 27% from 21%. Premium products contributed 23% versus 22% a year earlier. Trade prices improved 6% from the March 2026 exit price. The company reiterated its focus on aligning products to applications to strengthen the brand.

Financial summary for 1QFY27

The income statement showed operating expenses rising faster than revenue. Operating expenses increased 17% year on year to 1,961.80 crores, compressing EBITDA margin to 14% from 19%.

The quarter included exceptional income from sale of non-core assets. Profit on sale of non-core assets of 12.62 crores was recognized under exceptional items, taking reported profit before tax to 41.55 crores. The company also recorded current tax expense of 3.45 crores and deferred tax expense of 6.24 crores.

Segment revenue disclosure in the investor update indicated cement revenue of 2,182.86 crores and construction chemicals revenue of 86.11 crores, both up 10% year on year. Other income was 7.21 crores. The company noted that construction chemicals revenue excludes captive consumption used in the cement division, which is eliminated at the company level under Ind AS.

Costs rose as energy and packing pressures dominated

Margins were hit primarily by power and fuel costs and state levies. Power and fuel cost per ton increased to 1,326 in 1QFY27 from 1,222 in 1QFY26, a 9% rise, and increased 24% sequentially from 4QFY26. The company attributed this to the impact of the West Asia war, higher fuel costs per Kcal, and rupee depreciation of about 11% year on year. Blended fuel cost per Kcal rose to 1.85 from 1.55.

Packing material costs also increased meaningfully. The company disclosed that other expenditure per ton rose 8% year on year to 634, driven by a 30% increase in packing material cost due to higher polymer prices.

A separate pressure point came from a levy in Tamil Nadu. The investor update cited mineral bearing land tax at 160 per ton of limestone in Tamil Nadu, with an estimated impact of about 39 crores for 1QFY27. This was also reflected in raw material cost disclosure, where the company noted the levy’s impact is 84 per ton of cement at company level.

Not all costs moved against the company. Employee cost per ton decreased 5% year on year to 329, which the company attributed to operating leverage despite annual increments and additional manpower for the construction chemicals business. Raw material cost per ton also declined to 1,013 from 1,056.

Logistics cost per ton increased to 1,061 from 1,038 year on year. The company disclosed that rail coefficient for cement dispatches was 9% in 1QFY27 versus 8% in 1QFY26, while average lead distance was 264 km versus 246 km.

Balance sheet, capex, and funding: expansion continues alongside asset sales

The company incurred capex of 176 crores during 1QFY27 and estimated FY27 capex at 800 crores. It reiterated the plan to achieve cement capacity of approximately 31 MTPA during FY27 through debottlenecking of existing integrated units and brownfield expansion at Kalimigundala. It also stated that a 15 MW waste heat recovery system is expected to be commissioned at Kalimigundala along with Kiln Line-2 in FY27.

Alongside capex, the company continues to monetize non-core assets. Over the two years up to March 2026, it disclosed monetization of 1,098 crores through sale of non-core assets. It stated that steps are underway to dispose remaining identified non-core assets valued at around 150 crores in the near term, and that 24 crores was realized during 1QFY27.

Borrowings increased over the March 2026 level. Total borrowings stood at 4,007.31 crores at 30-06-2027 compared with 3,852.05 crores at 31-03-2026. Lower cash and cash equivalents of 69.12 crores meant net debt increased to 3,938.19 crores from 3,664.24 crores.

Finance costs declined to 95.58 crores from 104.74 crores year on year, supported by a lower effective interest rate of 7.03% versus 7.64%. Depreciation rose to 189.87 crores, which the company attributed to commissioning of facilities such as WHRS at RR Nagar and a railway siding at Kolimigunda in the previous year.

Key ratios underscored the profitability compression. EBITDA ratio fell to 14%, PBT ratio including exceptional items was 1%, and PAT ratio was 1%. Debt-equity ratio was 0.49.

ESG indicators and brand-building activity

The investor update included a snapshot of ESG indicators based on 1QFY27 figures. CO2 emission was reported at 571 kg per ton of cement, blended cement at 66%, water positive at 4.5 times, and green energy at 37%. CSR beneficiaries were reported as over 2,000.

On the brand side, the company highlighted recognition for its Hard Worker campaign and Eco Plaster creative work, with multiple awards across Kyoorius Creative Awards 2026 and Good Ads Matter Awards 2026, along with safety and EHS awards for multiple units.

Takeaways from the quarter

1QFY27 showed that Ramco’s topline can grow even in a disrupted demand environment, but cost shocks can quickly compress margins. The quarter’s results were shaped by higher fuel and packing costs and the additional burden of the Tamil Nadu mineral bearing land tax. The company’s FY27 program remains anchored on capacity expansion, waste heat recovery commissioning, and continued monetization of non-core assets to support funding needs, while the operating environment remains sensitive to fuel and currency volatility.