‘Strong cash flow to help resist shocks’
The Ramco Cements Ltd., the fifth-largest cement manufacturer in the country, plans to become debt-free in the next three years, a top executive said.
“FY21 is going to be another challenging year for the cement industry,” A.V. Dharmakrishnan, CEO, Ramco Cements, said in a note to shareholders.
“While the initial few months were impacted by COVID-19 related lockdown, the remaining months would see slower pick up as majority of Government spending gets channelised towards healthcare and supporting weaker sections of society,” he added
Mr. Dharmakrishnan said that strong cash flows of ₹1,102 crore and low debt equity ratio of 0.61 as on March 2020, provided sufficient headroom for growth and cushion to resist any shocks.
“Our priorities will be to efficiently market products and to become a debt-free entity in the next three years,” Mr. Dharmakrishnan added.
The company’s ₹3,500 crore capex programmes across southern and eastern States are on track. This additional capacity comes on stream at a time when the demand is expected to be weak, said P.R. Venketrama Raja, chairman, The Ramco Cements Ltd.
Asserting that weak global demand, supply disruptions, lockdown and delayed capex cycle will impact the construction industry, he said that the company expected the demand to revive from the second half of FY21, with a pick-up in rural housing, PM Awas Yojana, PM Gram Sadak Yojana and spending on key infrastructure projects.
“Our focus until then will be to stabilise operations at the newly commissioned plants and ensure steady progress of ongoing projects,” he said.
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