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    ACC

    ACC
    Construction Materials·31 Jul 2025
    Management Summary

    Ambuja Cements reported a strong Q1 FY26, achieving its highest-ever sales volume and revenue, driven by robust volume growth and improved realizations. Profitability metrics like EBITDA per tonne and PAT also saw significant YoY increases. The company continues its aggressive capacity expansion and cost optimization initiatives, including increasing green power usage and integrating recent acquisitions, despite some temporary sequential cost bumps related to M&A integration and scheduled maintenances.

    Highlights

    5

    • Highest ever sales volume of 18.4 million tonnes, reflecting 20% YoY growth.

    • Revenue of ₹10,289 crores, marking a 23% YoY increase.

    • EBITDA per metric tonne improved by 28% YoY to ₹1,069, with EBITDA margin at 19.1%, up 3.8%.

    • Net worth stood at ₹66,436 crores, and the company remains debt-free with AAA ratings.

    • Green power share improved by 9.7% to 28.1%, contributing to cost efficiency.

    Concerns

    2

    • Sequential increase in power, fuel, logistics, and other opex due to Orient acquisition and integration disruption, though expected to stabilize.

    • ACC's profitability lags Ambuja due to reliance on third-party coal, higher power costs (₹6.10/unit vs Ambuja's ₹5.30/unit), and lower WHRS factor (14% vs 21%).

    What Changed2

    vs Q2 FY26

    Guidance items16 → 12 (-4)Risks discussed4 → 3 (-1)

    Key financials

    Single quarter

    08 metrics
    1. 01Sales Volume18.4 MT+20%YoY
    2. 02Revenue₹10,289 Cr+23%YoY
    3. 03EBITDA₹1,961 Cr
    4. 04EBITDA/tonne₹1,069+28.0%YoY
    5. 05EBITDA Margin19.1%+3.8%YoY

    Capital allocation

    5
    high confidence
    CategoryHeadline
    Capex

    ₹2,000 crores this quarter · ₹9,000 crores (FY26) planned

    Debt

    Gross ₹0 crores · Net ₹0 crores · 0.0x EBITDA

    M&A

    Orient Cement

    acquisition · integrated

    M&A

    Sanghi and Penna

    acquisition · pending regulatory

    Liquidity

    Cash ₹3,000 crores

    Cash balance of ₹3,000 crores after accounting for Orient acquisition, ₹2,000 crores capex, and ₹550 crores dividend.

    Guidance & targets

    12
    CategoryTargetPriority
    Market Share
    Demand Estimate
    7-8%
    		High
    Profitability
    EBITDA per metric tonne
    ₹1,500
    		High
    Profitability
    ACC EBITDA Gap Bridge
    4-digits
    		Medium
    Capacity
    Total Cement Capacity
    118 million tonnes
    		High
    Capacity
    Total Cement Capacity
    140 million tonnes
    		High
    Cost Efficiency
    Green Power Share Uptake
    60%
    		High
    Cost Efficiency
    Power Cost Reduction
    ₹4.5 per unit
    		High
    Cost Efficiency
    Power Consumption Improvement
    at least 5 units
    		Medium
    Cost Efficiency
    Heat Consumption Improvement
    35 to 40 kilo calorie per kg of clinker
    		Medium
    Logistics
    Primary Lead Distance Reduction
    almost 50 km
    		Medium
    Logistics
    Logistics Cost Reduction
    ₹150 per metric tonne
    		Medium
    Cost Saving
    Cost Saving Target
    ₹530 per tonne
    		High

    Penna Clinker Commissioning

    by end of September (Q2 FY26)
    CurrentApprovals received, process ongoing
    TargetClinker capacity operational

    Why it matters

    Timely commissioning of Penna clinker capacity is crucial for regional market presence and overall capacity utilization.

    So Naveen, clinker should be coming to us, you know, let us say, Q2 itself, by the end of September.

    How to verify

    capital_allocation.m_and_a[target='Penna'].status

    Risks & concerns

    3
    RiskSeverity

    Sequential cost increase due to M&A integration

    Power, fuel, logistics, and other opex saw a sequential increase due to the integration of acquired assets like Orient Cement, causing temporary disruption. — Analyst acknowledged

    medium

    Lower profitability of ACC compared to Ambuja

    ACC faces higher fuel costs due to third-party coal reliance, higher power costs (₹6.10/unit vs Ambuja's ₹5.30/unit), and lower WHRS efficiency (14% vs 21%), resulting in a ₹300-₹400/ton EBITDA gap. — Analyst acknowledged

    medium

    Temporary cost bumps from scheduled maintenances

    Scheduled maintenances and early monsoon caused temporary cost increases in Q1, expected to neutralize over the full year. — Management acknowledged

    low

    Q&A highlights

    8

    “That you are comparing q-on-q while I was referring to y-on-y. In terms of q-on-q also, Rahul, for example, when it was 1263 for the last quarter and with for example, when you have these acquired assets, especially when you have now Orient also, there will be some disruption on the overall say, cost compared to say, March. In March, for example, you did not have Orient and now you have, say, Orient.”

    Clarified that sequential cost increases were primarily due to the integration of Orient Cement and related disruptions, with expectations of stabilization.

    asked by Mr. Rahul Gupta

    2 min read6 chapters

    Detailed Narrative

    01

    Robust Volume Growth and Market Share Expansion

    The company achieved its highest-ever sales volume of 18.4 million tonnes in Q1 FY26, representing a significant 20% year-on-year growth. This performance led to a 2% increase in market share, reaching 15.5%. Management noted that even after adjusting for acquired assets, the underlying volume growth for erstwhile Ambuja and ACC capacity was a healthy 13%.

    02

    Strong Financial Performance and Profitability Improvement

    Revenue for the quarter crossed the ₹10,000 crore mark, standing at ₹10,289 crores, a 23% increase YoY. EBITDA per metric tonne improved by 28% YoY to ₹1,069, with the overall EBITDA reaching ₹1,961 crores. The EBITDA margin expanded by 3.8% to 19.1%. Net profit after tax (PAT) grew by 24% YoY to ₹970 crores, translating to an EPS of ₹3.20, up 22% YoY. The company remains debt-free with a net worth of ₹66,436 crores.

    03

    Aggressive Capacity Expansion and Green Initiatives

    Current total cement capacity stands at 104.5 million tonnes. The company commissioned 5 million tonnes of grinding capacity in the last three months and targets an additional 13 million tonnes this financial year, aiming for 118 million tonnes by FY26 end and 140 million tonnes by FY28. Green power share increased by 9.7% to 28.1% and is targeted to reach 60% by FY28, which is expected to reduce power costs from ₹5.9 to ₹4.5 per unit.

    04

    Cost Optimization and Logistics Efficiency

    Cost per metric tonne improved by ₹119 YoY. The company is on track to achieve its ₹530 per tonne cost saving target, having already realized ₹175-₹200 per tonne. Initiatives include improving power consumption by at least 5 units and heat consumption by 35-40 kilo calories per kg of clinker. Primary lead distance was reduced by 8 km to 269 km this quarter, with a target to reduce it by another 50 km, aiming for a ₹150 per metric tonne reduction in logistics costs.

    05

    M&A Integration and Strategic Outlook

    The integration of Orient Cement (acquired April 25) is progressing seamlessly, contributing to market presence and volume growth, though it caused some temporary sequential cost disruptions. Approvals for Sanghi and Penna acquisitions have been received, with the completion process ongoing. The company maintains a bullish outlook on cement demand, revising its estimate from 6-7% to 7-8% for the financial year, driven by government infrastructure projects.

    06

    ACC Specific Performance and Improvement Plans

    ACC's profitability currently lags Ambuja due to its reliance on third-party coal (vs Ambuja's captive mines), higher power costs (₹6.10 per unit for ACC vs ₹5.30 for Ambuja), and a lower WHRS factor (14% for ACC vs 21% for Ambuja). Management aims to bridge this ₹300-₹400 per tonne EBITDA gap for ACC to reach 4-digit EBITDA per tonne sooner through investments in efficiency and brand equity. Scheduled maintenances at ACC plants like Wadi also contributed to temporary cost bumps this quarter.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.