RAMCO CEMENTS PERFORMANCE REMAINED WEAK FOR Q2FY23

News:

Revenues came in at Rs 1793.7 crore (up 20.1% YoY, 0.8% QoQ), that remained above our estimates largely due to better volumes

• Sales volume was up 22.1% YoY, flat QoQ to 3.31MT (vs I-direct est: 3.15MT). Realisations broadly remain steady (up 0.8% QoQ0 and remained better than estimates

• The blended fuel consumption per ton is equivalent to $199 vs $97 last year. Since the overall fuel prices have peaked during the CV, the P&F cost per ton of cement for Q2FY23 has sharply increased to Rs 2,013/- from Rs 1,056/- in the Q2 of last year

• This led to sharp fall in the EBITDA that declined 52.3% YoY to Rs 187.7 crore. EBITDA/t were down 61% YoY, 38% QoQ to Rs 567/tonne (vs I-direct est of Rs 639/tonne)

• Net profits declined sharply by 97.6% YoY, 89.2% QoQ to Rs 12.2 crore on lower margins and higher interest costs

• Updates on ongoing projects

  • The cement production in Kolimigundla (Kurnool AP) has commenced from Sep-22 onwards. The Hon'ble Chief Minister of Andhra Pradesh Sri.Y.S.Jagan Mohan Reddy inaugurated the operations of the unit. The company's cement capacity has gone to 21MT with clinker capacity of 14 MT
   
  • The 6 MW of WHRS in Kolimigundla will be commissioned in Nov-22. Balance 6 MW of WHRS will be commissioned in Mar-23. TPP of 18 MW and railway siding will be commissioned in 2023-24
   
  • The modernization of RR Nagar plant will be commissioned before Mar-23. After completion of this project, the clinker capacity at RR Nagar will increase from 1.09 MTPA to 1.44 MTPA. With regard to expansion of capacity of its dry mix products, two units in Tamilnadu are ready for commissioning and market trials for products are in progress. The remaining two units in AP & Orissa will be commissioned during 2023-24
   
  • The Company proposes to increase the grinding capacity of Haridaspur plant (Odisha), Odisha by 0.9 MTPA at a cost of only Rs 130 crore since other infrastructures are already in place, thereby doubling its capacity to 1.8 MT
   
• During Q2, the company has incurred |504 crore towards capex, including for the above-mentioned ongoing capacity expansion program. The net debt for the company as on Sep-22 is Rs 4,741 Crores, out of which Rs 724 crore is short-term loan. The average cost of interest-bearing borrowings for the Q2FY23 is increased to 6.42% from 5.47% in the Q2 of last year