RAMCO shifts to coal as 1HFY27 power and fuel cost per tonne rises 22%

In 1HFY27, The Ramco Cements Ltd increased coal to 77% of its fuel mix from 46% a year earlier, yet power and fuel cost per tonne rose 22% to Rs 1,363 from Rs 1,120. The company reported higher blended fuel cost per kilocalorie and said roughly 10% rupee depreciation affected fuel cost.

Why did RAMCO shift its fuel mix toward coal?

RAMCO described its approach as optimal fuel usage based on cost per calorific value, or CV, and coal became its main disclosed fuel in 1HFY27. Coal represented 77% of the mix, up 31 percentage points from 46% in 1HFY26, while pet coke fell 30 percentage points to 22% from 52%. Alternate fuel declined to 1% from 2%.

The quarterly mix shows the change was sustained through the first half rather than limited to one period. Coal accounted for 83% in 1QFY27 and 72% in 2QFY27, compared with 49% in 2QFY26. Pet coke was 16% in 1QFY27 and 27% in 2QFY27, against 50% in the comparable prior-year quarter.

The disclosed change was principally a reweighting between coal and pet coke, not an expansion in alternate fuel. In 1HFY26, pet coke was the largest component at 52%, ahead of coal at 46%; in 1HFY27, coal led at 77% and pet coke was 22%.

How much did RAMCO's power and fuel cost per tonne increase?

RAMCO's power and fuel cost per tonne increased by 22% to Rs 1,363 in 1HFY27 from Rs 1,120 in 1HFY26. The increase of Rs 243 per tonne occurred while the company shifted coal's share of fuel consumption to 77% from 46% over the same periods.

The year-on-year increase was larger in the second quarter. Power and fuel cost per tonne was Rs 1,397 in 2QFY27, 36% above Rs 1,029 in 2QFY26. It was also Rs 71 per tonne, or 5%, above Rs 1,326 in 1QFY27.

The 1HFY27 amount was Rs 34 per tonne below the 2QFY27 level, reflecting the Rs 1,326 per tonne recorded in 1QFY27. In contrast, 1HFY26 cost of Rs 1,120 per tonne was Rs 91 per tonne above the Rs 1,029 recorded in 2QFY26.

What fuel-price and currency factors did RAMCO disclose?

RAMCO reported blended fuel cost per kilocalorie of Rs 1.92 in 1HFY27, up from Rs 1.52 in 1HFY26. In 2QFY27, the measure was Rs 1.99, compared with Rs 1.85 in 1QFY27 and Rs 1.49 in 2QFY26.

Blended fuel consumption, including the thermal power plant, or TPP, was reported at US$134 per tonne of material in 1HFY27 versus US$125 in 1HFY26. The 2QFY27 figure was US$140 per tonne, above US$127 in 1QFY27 and US$122 in 2QFY26.

RAMCO also said fuel cost was impacted by rupee depreciation of about 10% year on year during 1HFY27. The presentation does not provide fuel-by-fuel purchase prices or quantify the separate rupee effects of coal, pet coke and currency movements on the Rs 1,363 per-tonne power and fuel cost.

How did RAMCO's power mix change in 1HFY27?

RAMCO increased green power's share of total power to 44% in 1HFY27 from 39% in 1HFY26. Thermal power declined to 41% from 45%, while grid power was 15%, compared with 16% a year earlier.

In 2QFY27, green power supplied 50% of total power, compared with 48% in 2QFY26 and 37% in 1QFY27. Thermal power was 38% in 2QFY27, versus 39% a year earlier, and grid power was 12%, compared with 13%.

The 44% half-year green-power share remained below the 50% reported in 2QFY27 because green power accounted for 37% in 1QFY27. RAMCO did not disclose a green-power target or a cost-per-unit comparison across green, thermal and grid sources.

How did higher costs coincide with RAMCO's first-half earnings?

RAMCO reported consolidated revenue of Rs 4,749.59 crore in 1HFY27, up 10% from Rs 4,325.28 crore in 1HFY26. Operating expenses increased 16% to Rs 4,103.01 crore, while earnings before interest, tax, depreciation and amortisation, or EBITDA, declined 19% to Rs 646.58 crore from Rs 798.06 crore.

Consolidated profit after tax was Rs 71.35 crore in 1HFY27, down 55% from Rs 160.21 crore in 1HFY26. Profit before tax before exceptional items fell to Rs 77.99 crore from Rs 214.70 crore, while a Rs 17.42 crore profit on sale of non-core assets resulted in reported profit before tax of Rs 95.41 crore.

Other disclosed cost movements accompanied the 22% increase in power and fuel cost per tonne. Logistics cost rose 2% to Rs 1,063 per tonne and other expenditure rose 8% to Rs 627 per tonne in 1HFY27. RAMCO attributed a 30% year-on-year increase in packing-material cost per tonne to higher polymer prices linked to the West Asia War.

Conclusion

RAMCO materially shifted its disclosed fuel mix from pet coke toward coal in 1HFY27, with coal increasing to 77% and pet coke declining to 22%. The cost outcome nevertheless rose, as power and fuel cost reached Rs 1,363 per tonne, blended fuel cost per kilocalorie increased to Rs 1.92, and the company cited about 10% rupee depreciation.

What to watch next is whether RAMCO provides a quantified split of the coal, pet coke and currency effects on fuel cost, which the presentation does not disclose. The company also disclosed no specific target for fuel mix, green-power share or power and fuel cost despite green power reaching 50% in 2QFY27.