Ramco’s capital expenditure and debt ratio are good
After virtually tripling its capital spending in the current fiscal year, South African cement maker Ramco Cements Limited has projected capital expenditure of Rs 1,700 crore for the forthcoming 2024–25 financial year (FY25).
It increased its projection for capital expenditures from Rs 900 crore twice to Rs 2,000 crore for the current year. The firm spent Rs 385 crore during the quarter ending in December 2023.
The business invested Rs 9,800 crore in capacity expansions between FY19 and FY24, adding 10 MTPA of new cement capacity in only five years. The current net debt is Rs 4,993 crore, and the cost of debt increased to 7.82% from 6.16% to 7.82% for the nine months ending on December 31 of last year. The business said that it is certain the net debt would be below Rs 5,000 crore.
According to Chief Financial Officer S Vaithiyanathan, free cash flow from operations accounted for around Rs 7,800 crore of the total amount of Rs 9,800 crore.
Among other things, the quarter’s expenditure increased dramatically for land acquisition. At an anticipated project cost of Rs 1,250 crore, the business intends to increase the clinker capacity in Kolimigundla to 6.30 million tonnes per year (MTPA) and the cement capacity to 3 MTPA with a 15 MW waste heat recovery system (WHRS). As a result, the company’s total installed capacity would increase to 26 MTPA for cement and 19 MTPA for clinker.
