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Ramco Cements Saves Big as Limestone Tax Ends
24 Aug
Summary
- Limestone tax removal offers significant cost relief.
- Tax savings could exceed FY26 net profit figures.
- Company faces higher input costs and lower realisations.
Ramco Cements will no longer incur the ₹160 per tonne tax on limestone mined in Tamil Nadu, a change that took effect on August 22, 2026. This development stems from the Mines and Minerals (Development and Regulation) Amendment Act, 2026, which restricts states from imposing such levies. The limestone tax had been a considerable expense for Ramco Cements, amounting to ₹171.78 crore in FY26 alone, a sum more than five times its standalone net profit for the latest reported quarter.
The cessation of this tax is anticipated to provide substantial cost relief, positively impacting the company's operating expenses, profits, and cash flows. This comes at a crucial time, as Ramco Cements recently announced a 62.8% year-on-year decline in its standalone net profit for the April-June quarter, reporting ₹32 crore. Revenue for the quarter saw a 9.6% increase to ₹2,269 crore, but EBITDA fell by 22.7% to ₹307 crore.
The company attributed its weaker performance to elevated fuel and packing material costs, exacerbated by the West Asia conflict, and a 5% decrease in realization. While the tax removal does not directly mitigate fuel costs or realization pressures, it removes a significant direct raw material-related expense from its cost structure. Ramco Cements shares closed 1.11% higher at ₹909 on August 24, 2026.
