Jefferies has flagged a new ₹160/tonne tax on limestone mining imposed by the Tamil Nadu government, which is expected to raise cement production costs in the state by ₹140-160/tonne. While this tax is currently specific to Tamil Nadu, the brokerage cautions that it could set a precedent for other states.
For South-focused cement players, Jefferies estimates a ₹40-70/tonne EBITDA impact on Dalmia Bharat and Ramco Cement, adding further cost pressure in an already challenged pricing environment in the region. This development is likely to necessitate price hikes to offset margin pressures.
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