Leading cement manufacturer Ramco Cements Ltd (RCL) said rising fuel, gypsum, diesel and packaging material costs are expected to exert pressure on margins in FY27, even as cement prices have started improving from April 2026.
RCL reported nearly fivefold rise in standalone net profit for the March quarter at ₹146 crore, aided by improved cement prices and profit from sale of surplus land amounting to ₹68 crore coupled with reversal of ₹6 crore towards change in the estimated impact of new labour code implementation.
Revenue growth, pricing support
Net revenue rose 9% to ₹2,405 crore, driven by improvement in cement prices. Cement revenue increased 8%, while revenue from construction chemicals grew 59%.
Total sales volume, including construction chemicals, rose marginally to 54 lakh tonnes against 52 lakh tonnes. However, cement capacity utilisation declined to 83% due to the addition of 2 MTPA capacity in February 2026.
The share of green power usage increased from 36% to 40%, supported by higher wind power generation, helping the company manage overall power and fuel costs.
Tamil Nadu levy impacts costs
Raw material cost per tonne increased 7% to ₹1,023 from ₹956, mainly due to the levy of mineral-bearing land tax of ₹160 per tonne of limestone in Tamil Nadu from April 2025.
The company said the levy translated into an additional variable cost impact of ₹86 per tonne of cement and noted that Tamil Nadu remained the only State imposing such a high levy. Ramco Cements, along with other cement manufacturers, has represented to the State government seeking reduction in the levy.
Expansion, capex
The company plans to increase cement capacity to 31 MTPA during FY27 through debottlenecking of existing integrated units and brownfield expansion at Kolimigundala. A 15 MW waste heat recovery system is also expected to be commissioned during FY27.
About 59% of total mining lands and 13% of total factory lands have been acquired so fa, for Karnataka green field project.
Ramco Cements incurred ₹997 crore towards capex during FY26 and has guided for ₹800 crore capex in FY27.
Debt reduction plans
Over the past two years, the company monetised ₹1,098 crore through sale of non-core assets and is in the process of disposing identified remaining assets worth ₹150 crore.
Net debt declined to ₹3,664 crore from ₹4,481 crore, reflecting a reduction of ₹817 crore during FY26. The company has proposed a dividend of ₹2.50 per share.
FY27 outlook
The company said higher pet coke and gypsum prices could increase costs by ₹400 per tonne of cement. While the impact of higher fuel costs is expected from Q2FY27 onwards, increases in diesel and packaging material costs are likely to affect Q1FY27 itself.
Cement prices improved by ₹15 per bag in the trade segment and ₹25 per bag in the non-trade segment in April 2026 over March exit prices, though competitive intensity continues to keep pricing under pressure.