Ramco Cements will no longer pay the ₹160 per tonne tax on limestone mined in Tamil Nadu, following the enactment of the Mines and Minerals (Development and Regulation) Amendment Act, 2026, which took effect from August 22, 2026. According to reports from CNBC TV18, the change removes a significant cost burden for the cement manufacturer, with the ₹160 per tonne limestone tax previously levied on mineral-bearing lands in Tamil Nadu. Under the amended law, states face restrictions on imposing taxes or other levies on mineral rights and mineral-bearing land, except under conditions prescribed by the central government. The newly enacted legislation effectively overrules independent state levies to maintain industrial competitiveness and establish uniform national taxation.
The tax elimination represents a substantial cost reduction for Ramco Cements, which had been paying ₹171.78 crore towards the Mineral Bearing Land Tax in FY26 and another ₹79.07 crore in FY27 so far. As reported by CNBC TV18, the ₹171.78 crore paid in FY26 was equivalent to more than five times the company's ₹32 crore standalone net profit reported in the latest quarter. With the levy now ending, Ramco Cements expects its operating costs to come down by a similar amount, which should have a positive impact on profits and cash flows. The cancellation of Tamil Nadu's ₹160 per tonne limestone levy removes a ₹100 crore+ annual cost burden, directly boosting EBITDA per tonne and operating cash flows. The company was disproportionately hit by the Tamil Nadu state levy compared to nationwide peers, with approximately 50% of its clinker capacity concentrated in Tamil Nadu.
The tax relief comes after Ramco Cements reported challenging financial results for the April-June quarter. According to CNBC TV18, standalone net profit fell 62.8% year-on-year to ₹32 crore from ₹86 crore a year earlier, though it exceeded the ₹25 crore estimate in a CNBC-TV18 poll. Revenue rose 9.6% to ₹2,269 crore from ₹2,070 crore in the year-ago quarter, beating the poll estimate of ₹2,210 crore. EBITDA fell 22.7% to ₹307 crore from ₹398 crore year earlier, but was slightly ahead of the ₹305 crore poll estimate. In Q2FY26, the tax added a variable cost impact of ₹40 crore to the company's operations.
Ramco Cements shares closed 1.11% higher at ₹909 on the NSE on August 24, gaining ₹9.95 during the session following the tax relief announcement. However, the company attributed the weaker operating performance to higher fuel and packing material costs following the West Asia war, along with a 5% year-on-year decline in realisation. As reported by CNBC TV18, the removal of the limestone levy may not address all pressures, particularly fuel costs and weaker realisations, but it removes one direct raw-material-related expense from the company's cost structure. The standardization of mineral taxation provides medium-term margin predictability for Southern cement manufacturers and curbs regional production cost inflation, though unabated pricing pressure and fragmentation in Southern India could dilute the positive impact of cost-saving reforms.
ICICI Securities has maintained a Hold rating on Ramco Cements with an unchanged target price of ₹942 in its research report dated August 25, 2026. The brokerage noted that while the cessation of the limestone tax offers much-needed cost relief, particularly in the face of high global crude oil and fuel costs, their estimates largely factor in these positives. ICICI Securities values TRCL at a rich 13x FY28E EV/EBITDA multiple, citing concerns about industry-wide elevated competitive intensity and low return on equity for the company. The brokerage's FY28E EBITDA per tonne estimate stands at ₹833 versus the company's Q1FY27 and Q4FY26 reported figures of ₹666 and ₹671 respectively.
