Ramco Cements targets 31 MTPA by March 2027 with Rs 800 crore capex

Ramco Cements plans to raise cement capacity from 27.17 million tonnes per annum (MTPA) after 2QFY27 debottlenecking to about 31 MTPA by March 2027, led by Kolimigundla Line-2 and supported by estimated FY27 capital expenditure of Rs 800 crore. Its 3.15-MTPA Kolimigundla clinker unit is expected by December 2026.

How will Ramco Cements reach 31 MTPA by March 2027?

Ramco Cements expects Kolimigundla Line-2 to take cement capacity to about 31 MTPA by March 2027. The company’s current cement capacity is 27.17 MTPA after completing debottlenecking work at Jayanthipuram in 2QFY27, which added 0.73 MTPA. The stated increase depends principally on the commissioning of Line-2 within the disclosed timetable.

The clinker unit at Kolimigundla has a capacity of 3.15 MTPA and is expected to be commissioned ahead of schedule by December 2026. The presentation identifies this as an earlier milestone than the March 2027 target for about 31 MTPA of cement capacity. Ramco Cements does not disclose a standalone cement-capacity figure for Kolimigundla Line-2.

The company also disclosed progress on its Karnataka Green Field project, where 61% of total mining land and 13% of total factory land had been acquired as of the 2QFY27 update. The investor presentation does not provide a commissioning date, project cost or capacity figure for the Karnataka project. It therefore remains separate from the disclosed March 2027 capacity target.

What capital projects is Ramco Cements spending on in FY27?

Ramco Cements estimates FY27 capital expenditure, or capex, at Rs 800 crore and had incurred Rs 373 crore in 1HFY27, including Rs 197 crore in 2QFY27. The company identified Kolimigundla Integrated Unit Line II, mining-land acquisition for the Karnataka project, a waste heat recovery system, or WHRS, plant at RR Nagar, and general capex as uses of first-half spending.

A 15-megawatt WHRS facility at Kolimigundla is expected to be commissioned with Line-2. Ramco Cements says the facility would bolster its green-power generation potential, although it does not quantify the resulting generation share or cost effect. The company reported green energy at 50% and carbon-dioxide emissions at 572 kilograms per tonne of cement for 2QFY27.

Ramco Cements has also proposed a construction-chemicals manufacturing unit at the Kolimigundla plant. The facility would have production capacity of 1.2 lakh tonnes per annum, cost Rs 20 crore and is expected to be completed by 2QFY28. Its completion timetable falls after the March 2027 cement-capacity target, and the presentation does not identify it as a contributor to the 31-MTPA plan.

How did Ramco Cements' first-half cash flow support expansion spending?

Ramco Cements generated Rs 271.96 crore of net cash from operating activities in 1HFY27, compared with Rs 645.66 crore in 1HFY26, while it spent Rs 372.57 crore on capex. Operating profit declined to Rs 644.92 crore from Rs 798.08 crore, and the working-capital cash outflow widened to Rs 352 crore from Rs 150.17 crore. The company said operating cash flow was affected by higher fuel and packing costs in connection with the West Asia war.

Net cash used in investing activities narrowed to Rs 333.07 crore in 1HFY27 from Rs 546.71 crore a year earlier, as capex was Rs 228.04 crore lower than in 1HFY26. Financing activities used Rs 105.28 crore, including Rs 134.53 crore of interest and lease-liability payments and Rs 59.13 crore of dividends. Borrowings availed were Rs 88.38 crore for working capital, compared with Rs 3.19 crore in 1HFY26.

What role do non-core asset sales and debt play in Ramco Cements' plan?

Ramco Cements monetised Rs 1,098 crore through sales of non-core assets over the two years to March 2026 and reported Rs 29 crore realised in 1HFY27. The company says assets valued at about Rs 150 crore remain identified for disposal, with active steps under way to sell them in the near term. The Rs 150 crore figure is the stated value of identified assets rather than reported sale proceeds.

Total borrowings rose to Rs 3,963.14 crore on September 30, 2026, from Rs 3,852.05 crore on March 31, 2026. Cash and cash equivalents used in calculating net debt fell to Rs 41.77 crore from Rs 187.81 crore over the same dates, taking net debt to Rs 3,921.37 crore from Rs 3,664.24 crore. Interest-bearing borrowings were Rs 3,932.22 crore of the September total, while interest-free or soft loans were Rs 30.92 crore.

On a standalone basis, the debt-equity ratio was 0.49 times in 1HFY27, compared with 0.61 times in 1HFY26, while the interest service cover ratio was 3.03 times versus 3.23 times. The earnings before interest, tax, depreciation and amortisation ratio declined to 14% from 18%, and the profit-after-tax ratio fell to 1% from 4%. The update lists ICRA ratings of AA+ for long-term debt and non-convertible debentures, and A1+ ratings for ICRA and CRISIL short-term debt.

Conclusion

Ramco Cements’ expansion programme combines the completed 0.73-MTPA Jayanthipuram debottlenecking with Kolimigundla Line-2, taking stated cement capacity from 27.17 MTPA to about 31 MTPA by March 2027. First-half capex of Rs 373 crore, operating cash flow of Rs 271.96 crore, working-capital borrowings and Rs 29 crore of non-core asset-sale proceeds set out the reported cash-flow elements alongside the capacity programme.

The next milestones are the expected December 2026 commissioning of Kolimigundla’s 3.15-MTPA clinker unit and the March 2027 capacity target. Investors can also watch whether Ramco Cements completes sales of about Rs 150 crore of identified remaining non-core assets, advances Karnataka land acquisition beyond 61% of mining land and 13% of factory land, and completes the Rs 20 crore construction-chemicals unit by 2QFY28.