Total income increased by 18.6% YoY to Rs 1510.33 crore during the quarter.

Total expenses rose by 32.3% to Rs 1,231.60 crore in Q2 FY22 over Q2 FY21, due to sharp increases in raw material costs (up 18.1% YoY), transportation & handling charges (up 38.9% YoY), power & fuel costs (up 57.1%) and other expenditures (up 30.7% YoY).

The company said that the average increase in diesel prices by 20% during the current quarter has resulted in increase of in-bound / out-bound logistics cost. The continuous increase in fuel prices is likely to push up the cost further in the coming quarters.

However, the operations of 18 MW WHRS in Jayanthipuram have helped to offset the power & fuel cost for the company to certain extent. The balance 9 MW WHRS in Jayanthipuram is expected to be commissioned in Q3 of the current year (CY).

In view of steep cost increase, the need for price increase is imperative to sustain the business operations. The company is conducting various meetings to educate dealers in this regard, it added.

EBIDTA for Q2 of CY is Rs 402 crore as against Rs 450 crore during Q2 of PY with de-growth of 11% due to increase in operating cost. Blended EBIDTA per ton for the Q2 of CV is Rs 1,484 as against Rs 2,035 during Q2 of PY. Operating ratio for Q2 of CY is 27% as against 36% in Q2 of PY.

Profit from ordinary activities before tax in Q2 FY22 stood at Rs 278.73 crore, down by 18.6% from Rs 342.62 crore in Q2 FY21.

The company wrote back taxes amounting to Rs 240.39 crore in Q2 FY22. It had incurred a tax expense of Rs 103.70 crore in the same period last year.

The cement maker said that as per certain section of the Income Tax Act, 1961, the company has an irrevocable option of shifting to a lower tax rate and simultaneously forgo certain tax incentives, deductions and accumulated MAT credit. In view of the overall tax benefits available under the said option, the company has opted for shifting to lower tax rate from FY 2021-22 during the current quarter.

Consequent to adoption of new tax regime, the company is entitled to write back the excess deferred tax provision of Rs 305.58 crore from deferred tax liability to P&L. While there will be no impact on profit before tax, the profit after tax will be higher by Rs 305.58 crore for the current quarter, it added.

Ramco Cements said that the Kurnool project is delayed mainly because of disruption of work force caused by COVID-19 since last 21 months. The clinkering unit of 2.25 MTPA in Kurnool is expected to be commissioned during 0-4 of FY 2021-22. The 1 MTPA cement grinding facility, 12 MW of WHRS and 18 MW of TPP in Kurnool are expected to be commissioned during FY 2022-23.

The company propose to modernise its RR Nagar plant at a cost of Rs 476 cores by installing a new energy efficient kiln of 3000 TPD to replace the existing kiln of 1450 TPD. It is expected to commission the new kiln before Mar-23. After completion of this project, the clinker capacity at RR Nagar will increase from 1.09 MTPA to 1.44 MTPA.

The company also propose to expand the capacity of its dry mix products in Tamil Nadu, Orissa and Andhra Pradesh with the total estimated cost of Rs 160 crore to produce high value products viz water proofing, repair products, flooring screeds including liquid products besides other regular dry ,mix products.

During Apr-21 to Sep-21, the company has incurred Rs 902 crore towards capex, including for the above-mentioned ongoing capacity expansion programme.

The Ramco Cements makes portland cement, ready mix concrete and dry mortar products, and operates wind farms.

The scrip shed 0.61% to currently trade at Rs 957.70 on the BSE.