Ramco Cements Ltd. and Dalmia Bharat Ltd. may be the most impacted by the Tamil Nadu government's imposition of additional mineral tax of Rs 160 per tonne on limestone mined in the state. Given limestone is a key raw material in cement production, this additional mineral tax will drive the cost of production for cement makers higher, according to Citi.
The tax, which came into effect from Feb. 20, follows the Supreme Court's decision last year, which allowed state governments to impose additional tax or royalties on minerals mined in the state.
Extent Of Impact
As per Citi Research, the additional tax impacts the highest amount of volumes of Ramco Cements and Dalmia Bharat. While UltraTech Cement Ltd., Ambuja Cement Ltd. and ACC Ltd. have limited impact.
There will be no impact on players like Shree Cement, JK Cement and Nuvoco Vista Corp.
Ebitda Impact
If the cement companies need to pass on this additional cost of production, they may need to undertake 3% price hike, according to Citi. This price hike will have to be taken in an environment that has been struggling for prices for several quarters now.
But as pan-India cement prices have improved in 2025, Citi does not expect a substantial price hike very soon.
In the absence of a price hike, the Ebitda impact of this Rs 160 per tonne mineral tax would be 10% for Ramco Cements and 4% for Dalmia Bharat, Citi said.
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