RAMCOCEM

"KS 14.11.1 4144,ny 7 4Mar ort, -A-TRA thbf 6.,.50,-W0110'.421AiltfA ' * Corporate Office: Auras Corporate Centre, V Floor, 98-A, Dr. Radhakrishnan Salai, Mylapore, Chennai - 600 004, India. Tel : +91 44 2847 8666 Fax: +91 44 2847 8676 Website : www.ramcocements.in Corporate Identity Number: 1.26941TN1957PLC003566 7 August 2023 National Stock Exchange of India Limited, Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai —400 051. Scrip Code: RAMCOCEM BSE Limited, Floor 25, "PITowers", Dalai Street, Mumbai —400 001. Scrip Code: 500260 Dear Sirs, Sub: Investor Update Pursuant to Regulation 30, read with Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we enclose a copy of the Investor Update on the performance of the Company for the quarter ended 30.06.2023, being shared at the Investors' Meets. Thanking you, Yours faithfully, For THE RAMCO CEMENTS LIMITED, K.SELVANAYAGAM SECRETARY Endl : As above Registered Office: `Ramamandiram% Rajapalayam - 626 117. Tamil Nadu Chengalpattu Grinding Plant, Tamil Nadu INNOVATE FOR A BETTER DIFFERENTIATE TOMORROW SUSTAINABLE Investor Update for 1QFY24 The Ramco Cements Limited Contents 01 Overview 02 TRCL’s Market update 03 Sales & Capacity Utilization 04 Key Performance 05 Financial Analysis & Key Ratios 06 Capex & Borrowings update 07 ESG Update The Ramco Cements Limited Investor Update 1QFY24 Overview  India's GDP growth for FY24 is projected at 6.5%. CPI inflation fell sharply to 4.7% in April 2023 compared to 5.7% in March 2023  Repo Rate remain unchanged at 6.5%. However, US Federal Reserve’s interest hike of 25 bps put the rupee under pressure  Domestic economic activity remains resilient in 1QFY24 with the manufacturing PMI at a 31-month high in May & services PMI at a 13 year high inApril-May  The government’s thrust on capital expenditure, moderation in commodity prices and robust credit growth are expected to nurture investment activity.  Increased allocation in Budget 2023 for: (i) PMAY Scheme by 66% to ` 79,000 crores; (ii) Investment in Infrastructure by 33% to `10 lakh crores; (iii) Capital outlay for Railways: ` 2.4 lakh crores, out of which south has got allocation of around ` 28,000 crores; (iv) Urban Infrastructure Development Fund: ` 10,000 crores; (v) 100 transport infrastructure projects identified for end- to-end connectivity for ports, coal, steel, fertilizer sectors with an investment of ` 75,000 crores.  Weak external demand, geo-economic fragmentation, and protracted geopolitical tensions pose risks to the outlook. Pass- through of input costs may keep inflation at elevated levels.  Crude oil prices have eased but the outlook remain uncertain; Sustenance of declining trend in pet coke prices  El Nino conditions could impact monsoon, impacting rural housing and farm income, could pose downside risks to the outlook The Ramco Cements Limited Investor Update 1QFY24 TRCL’s Market update for 1QFY24 South East Volume from B2C & B2B picked up Volume from B2B and B2C remained flat Non-availability of sand has impacted the demand in Kerala Supply disrupted due to rail accident for 20 days in Jun-23 Weak prices prevailed in all the markets NE Cement volume muted due to active monsoon rains Share of premium products in 1QFY24: 29%;1QFY23: 27% Weak prices prevailed in all the markets Margins were under pressure Share of premium products in 1QFY24: 18%;1QFY23:15% Volume share for 1QFY24: 79%;1QFY23: 73% Volume share for 1QFY24: 21%;1QFY23: 27% Company’s strategy of right cement for right applications yielding positive results. The company continue to focus on this to make its brand more stronger The Ramco Cements Limited Investor Update 1QFY24 Sales & Capacity utilization Cement Capacity Utilization % 68% 79% 85% Utilization Utilization Utilization 1QFY23 1QFY24 4QFY23 1QFY23: OPC 26%; B2B 31% 1QFY24: OPC 32%; B2B 35% 4QFY23: OPC 33%; B2B 37% Cement Sales (Lac Tons) Dry Mortar Sales (Lac Tons) +28% -9% +123% -7% 46.28 0.72 42.33 0.67 33.10 0.30 1QFY23 1QFY24 4QFY23 1QFY23 1QFY24 4QFY23 The Ramco Cements Limited Investor Update 1QFY24 Key Performance for 1QFY24 ` in Crores Revenue Cash profit +26% -13% 3% 2,581 -23% 323 2,249 1,779 243 250 1QFY23 1QFY24 4QFY23 1QFY23 1QFY24 4QFY23 Cash profit = PBT + Depreciation –Current Tax Profit Before Tax Profit After Tax -30% -48% 207 -30% -48% 152 154 112 108 79 1QFY23 1QFY24 4QFY23 1QFY23 1QFY24 4QFY23 Better absorption of fixed cost due to high operatingleverage Sale volume of 4.3 MnT in 1QFY24with a industry leading growth of 29% YoY PBT is lower due to increased finance cost & depreciation on account of Margins impacted due to elevated fuel prices & weak prices in all markets commissioning of units in JPM Line III, Kolimigundla, R R Nagar Line III and Dry Mortar Plants The Ramco Cements Limited Investor Update 1QFY24 EBITDA ` in Crores 450 +14% -18% 424 400 349 350 308 300 250 200 150 100 1QFY23 1QFY24 4QFY23 EBITDA/ Ton `921/T `812/T `903/T During 1QFY24, the sale volume is higher by 29% YoY & down by 9% compared Rupee depreciation by 7% has pushed up imported fuel price to 4QFY23 Fixed cost absorption was comparatively better due to improved operating Power and fuel cost has increased by ` 188 / Ton YoY. Even though fuel prices leverage have softened for a brief period, the full effect of price reduction is expected to reflect from 2QFY24, in view of high base inventory during the current quarter. Impact of continued levy of Busy season surcharge by railways since Oct’22 is around ` 60 per ton for inbound &outboundlogistics cost Share of premium products improved to 27% in 1QFY24 The Ramco Cements Limited Investor Update 1QFY24 Interest & Depreciation ` in Crores Interest cost & its effective rate Depreciation +97% +21% +40% +5% 14.00% 160 148 141 93 100 12.00% 140 77 80 10.00% 120 106 100 8.00% 60 47 7.95% 7.85% 80 6.00% 40 60 5.68% 4.00% 40 20 2.00% 20 - 0.00% - 1QFY23 1QFY24 4QFY23 1QFY23 1QFY24 4QFY23 Finance cost & Depreciation increased due to commissioning of units in JPM Line III, Kolimigundla, R R Nagar Line III and Dry Mortar Plants Increase in repo rate from 4% inApril 2022 to 6.50% in June 2023 The Ramco Cements Limited Investor Update 1QFY24 Income Statement for 1QFY24 ` in Crores Standalone Consolidated Particulars 1QFY24 1QFY23 Variance % 1QFY24 1QFY23 Variance % 2,248.98 1,779.39 26% Revenue 2,253.95 1,785.64 26% 1,899.63 1,471.83 29% Less: Operating Expenses 1,903.20 1,476.30 29% 349.35 307.56 14% EBITDA 350.75 309.34 13% 93.39 47.48 97% Less: Finance Costs 93.39 47.48 97% 147.89 106.38 39% Less: Depreciation 149.71 106.81 40% 108.07 153.70 30% Profit Before Tax 107.65 155.05 31% 5.73 18.86 70% Less: Current Tax Expenses 6.22 19.35 68% 23.43 22.57 4% Less: Deferred Tax Expenses 22.79 22.43 2% 78.91 112.27 30% ProfitAfter Tax 78.64 113.27 31% 79.30 111.83 29% Total Comprehensive Income 75.79 110.01 31% The Ramco Cements Limited Investor Update 1QFY24 Cost of raw materials per ton In ` +6% -4% 952 911 857 6% 1QFY23 1QFY24 4QFY23 Decrease in Diesel price by 4% Continued levy of Busy season surcharge by railways since Oct’22. The Impact is around ` 30/ T for inward material movements Inflationary impact on cost of other raw materials viz. Fly ash, Slag & Gypsum The Ramco Cements Limited Investor Update 1QFY24 Logistics cost per ton In ` -1% Flat 1,077 1064 1,063 6% 1QFY23 1QFY24 4QFY23 Rail Co-efficient for cement despatches 1QFY24 is 7% vs. 13% in 1QFY23 & & 12% in 4QFY23 Avg. lead distance for 1QFY24 is 274 KMs vs 301 KMs in 1QFY23 & 310 KMs in 4QFY23 The effect of 15% levy of Busy Season Surcharge is offset by reduction in lead distance The Ramco Cements Limited Investor Update 1QFY24 Power and Fuel Cost per ton In ` Without adjustments for changes in inventories With adjustments for changes in inventories +12% +8% +7% -4% 1,758 1,742 6% 1,635 1,669 1,570 -15% 1,554 1QFY23 1QFY24 4QFY23 1QFY23 1QFY24 4QFY23 Blended Fuel consumption (incl. TPP) per T of material: 1QFY24: $ 170; 1QFY23: $ 157; 4QFY23: $ 178 Blended Fuel cost per Kcal: 1QFY24: 2.03; 1QFY23: 1.87; 4QFY23: 2.21 Wind energy capacity of 133 MW shifted from ‘Sale to Grid’ to ‘Captive use’ in phased manner during 1QFY24. This will lead to reduction on cement cost by `70 to ` 80 per ton at company level in the coming quarters. Clinker production was higher by 8% in 1QFY24 compared to 4QFY23 while cement sale volume was down by 9% Rupee depreciation by 7% has also impacted the fuel cost The Ramco Cements Limited Investor Update 1QFY24 Power / Fuel Mix 17% 27% 27% 44% 1QFY23 1QFY24 50% 4QFY23 19% 64% 23% 29% Grid power Green Power Thermal Power The share of Green Power is expected to reach 40% for FY24 31% 30% 40% 1QFY23 52% 1QFY24 4QFY23 54% 56% 16% 13% 8% Coal Alternate Fuel Pet coke The Ramco Cements Limited Investor Update 1QFY24 Employee Cost per ton In ` -16% +22% 349 294 241 1QFY23 1QFY24 4QFY23 Better absorption of employee cost is due to improved operating leverage Employee Cost include Managing Director’s remuneration, in accordance with Ind AS 19 The Ramco Cements Limited Investor Update 1QFY24 Other Expenditure per ton In ` -13% +4% 6% 620 541 521 1QFY23 1QFY24 4QFY23 Better absorption of fixed expenses is due to improved operating leverage The Ramco Cements Limited Investor Update 1QFY24 Key Ratios Particulars UOM 1QFY24 1QFY23 4QFY23 FY23 EBITDARatio % 16% 17% 16% 15% PBT Ratio % 5% 9% 8% 6% PAT Ratio % 4% 6% 6% 4% EPS, Not Annualized ` 3 5 6 15 RoE, Annualized % 5% 7% 9% 5% RoCE (Post-tax), Annualized % 6% 6% 8% 5% Debt-Equity Ratio Multiples 0.65 0.64 0.66 0.66 Debt Service Cover Ratio, Multiples 1.99 1.76 1.26 1.31 Annualized Interest Service Cover Ratio Multiples 1.78 2.57 2.81 2.06 Current Ratio Multiples 1.06 1.26 1.08 1.08 Ratios computed based on Standalone figures The Ramco Cements Limited Investor Update 1QFY24 Capex update & Borrowings Borrowings as on 30-06-2023 Capex incurred during 1QFY24: ` 284 Crores Particulars ` in Crores Kurnool Integrated Unit: Cement capacity utilization ramped upto Interest-bearing Borrowings ~ 97% in 1QFY24 - Long Term Debt 3,875.48 In Kurnool, 3 MW of WHRS will be commissioned in 2QFY24. TPP - Short Term Debt 479.19 of 18 MW and railway siding will be commissioned before end of Interest Free / Soft Loans 125.36 FY24. Gross Debt 4,480.03 RR Nagar Line III: Clinker Capacity Utilization ramped to 100% in Less: Cash and Cash Equivalents 74.48 1QFY24 Net Debt 4,405.55 Limestone Benefication Plant in RR Nagar commissioned in July Credit Ratings 2023. Particulars Rating ICRA Rating Expansion of Dry Mortar Plant: 2 units in AP & Odisha will be commissioned during FY24. - Long Term Debt AA+ - Short Term Debt A1+ Odisha Grinding Unit Line II with cement capacity of 0.9 MTPA is - Non-Convertible Debentures AA+ expected to commission before end of FY24. CRISIL Rating Land acquisition for Bommanahalli project is under progress. - Short Term Debt A1+ The Ramco Cements Limited Investor Update 1QFY24 ESG Update CO Emission Blended Cement Water Positive Green energy CSR 2 601 Kg / T of Cement 68% 3.8x 29% 18,000 + Beneficiaries Based on 1QFY24 figures Firm and Focussed for a sustainable future The Ramco Cements Limited Investor Update 1QFY24 Disclaimer This communication, except for the historical information, may contain statements which reflect the Management’s current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange and commodity price fluctuations, competitive product and pricing pressures, regulatory changes, economic developments within India and other countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement, due to any subsequent development, information or events, or otherwise. Corporate Office: Stock Code: BSE: 500260 NSE: RAMCOCEM No.98A, Auras Corporate Center, 5th Floor, www.ramcocements.in Dr.Radhakrishnan Salai, Mylapore, Chennai 600004