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    ACC Q1 FY27 earnings call

    ACC
    Construction Materials·28 Jul 2026
    Management Summary

    ACC Limited reported a strong Q1 FY27 with ₹9,500 crores revenue and a significant 331 bps EBITDA margin expansion to 16.7%, driven by a sequential ₹206/ton reduction in net operating cost. The company's strategic focus on value over volume led to a Y-o-Y volume decline, particularly in non-trade, but trade sales share improved to 78%. Capacity expansion remains on track, targeting 119 MT by FY27, supported by green energy initiatives reducing power costs. Management expressed confidence in achieving its FY27 cost target of ₹4,250/ton despite anticipated Q2 cost pressures from geopolitical factors.

    Highlights

    5

    • Revenue of ₹9,500 crores and Operating EBITDA of ₹1,589 crores for Q1 FY27.

    • EBITDA margin improved 331 basis points to 16.7%, with EBITDA per ton at ₹931.

    • Net operating cost reduced by ₹206 per metric ton sequentially to ₹4,241 per metric ton, aligning with FY27 target of ₹4,250/ton.

    • Trade sales share increased from 74% to 78%, with July showing an 8% improvement in trade volumes.

    • Capacity expansion on schedule, targeting 119 million tons by end of FY27, with Dahej, Salai Banwa, Bhatinda, and Jodhpur units commencing or nearing commissioning.

    Concerns

    3

    • Overall volume declined 2% Y-o-Y on trade and 21% Y-o-Y on non-trade in Q1 FY27, attributed to geopolitical tensions and strategic reduction of low-margin volumes.

    • RMC segment EBITDA margin dropped sharply to 7% in Q1 FY27 from 14-15% in previous quarters, though management noted it's a smaller segment.

    • Geopolitical tensions are expected to cause sequential cost pressure in Q2 FY27, with a potential rise of ₹100/ton, though mitigated by inventory and cost initiatives.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹9,500 Cr
    2. 02Operating EBITDA₹1,589 Cr
    3. 03EBITDA Margin16.7%
    4. 04EBITDA per ton₹931
    5. 05Net Operating Cost₹4,241-4.6%QoQ

    Segment breakdown

    RMC
    ₹33 Cr EBITDA7% EBITDA Margin
    List

    Capital allocation

    6
    high confidence
    CategoryHeadline
    Capex

    ₹1,500 crores this quarter · ₹6,500 crores (FY27) planned

    Debt

    Gross ₹0 crores · Net ₹0 crores

    M&A

    Penna

    acquisition · integrated

    M&A

    Sanghi

    acquisition · integrated

    M&A

    Orient Cement

    acquisition · integrated

    Guidance & targets

    10
    CategoryTargetPriority
    Volume
    Volume growth (trade)
    8%
    		High
    Cost
    Total cost per ton
    INR4,250
    		High
    Cost
    Additional cost savings
    INR250 per ton
    		High
    Capacity
    Installed capacity
    119 million tons
    		High
    Capacity
    Annual capacity additions
    8-10 million tons
    		High
    Green Power
    Green power share (consumption basis)
    60%
    		High
    TSR
    Thermal Substitution Rate (AFR)
    12-15%
    		High
    TSR
    Thermal Substitution Rate (AFR)
    25%
    		High
    Capacity Utilization
    Value-focused capacity utilization
    70-75%
    		Medium
    Trade Sales
    Share of trade sales
    upwards of 75%
    		High

    What to watch in Q2 FY27

    5

    Overall Volume Growth

    Next quarter (Q2 FY27) and full FY27
    Current2% negative Y-o-Y (trade) and 21% negative Y-o-Y (non-trade) in Q1 FY27, with 8% trade volume improvement in July
    TargetAchieve 8% volume growth for FY27

    Why it matters

    Volume growth is a key indicator of demand and market share, especially after a strategic decline in Q1. Sustaining July's trade volume improvement is crucial for the FY27 target.

    in the month of July... already seeing an 8% improvement on the trade volumes. confidence to continue with our estimation and guidance of 8% growth, which we are targeting for this financial year.

    Risks & concerns

    4
    RiskSeverity

    Geopolitical tensions impacting fuel and freight costs

    Geopolitical developments in West Asia led to higher imported fuel prices and elevated freight costs, causing profitability pressure across the industry. Potential rise of ~INR100/ton in Q2 FY27. — Management acknowledged

    medium

    Overall volume decline (Y-o-Y)

    The company experienced a 2% negative Y-o-Y growth on trade and a 21% negative Y-o-Y growth on non-trade volumes, attributed to a strategic reduction of lower-margin volumes and geopolitical factors affecting diesel availability. — Management acknowledged

    medium

    RMC segment margin drop

    EBITDA margin for the RMC segment fell sharply to 7% in Q1 FY27 from 14-15% in previous quarters, though management noted it's a smaller segment and cited raw material pricing and accounting factors. — Analyst downplayed

    low

    Temporary suspension of manufacturing operations

    Approximately 3.5 million tons of annual capacity from some older ACC facilities and one acquired company were temporarily suspended for optimization, expected for about six months. — Management acknowledged

    medium

    Q&A highlights

    8

    “Further to our letter dated July 14, 2026, regarding Analyst / Institutional call scheduled on July 28, 2026, please note that the transcript of the earnings conference call on the unaudited financial results (Standalone & Consolidated) for the quarter ended on June 30, 2026, is uploaded on the website of the Company at www.acclimited.com.”

    Analyst questioned the Y-o-Y volume decline (2% trade, 21% non-trade) despite management's focus on trade, and sought clarification on the confidence for 8% FY27 volume growth. Management explained it was a calculated move to reduce low-margin non-trade volumes and highlighted July's 8% trade volume improvement.

    asked by Navin Sahadeo, ICICI Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance and Strategic Overview

    ACC Limited reported a disciplined Q1 FY27 performance with revenue of ₹9,500 crores and operating EBITDA of ₹1,589 crores. The EBITDA margin expanded by 331 basis points to 16.7%, resulting in an EBITDA per ton of ₹931. This was achieved despite a challenging operating environment characterized by stable cement demand but pressure from higher imported fuel prices, elevated freight costs, and geopolitical developments. The company absorbed an additional cost of ₹50 per metric ton due to scheduled maintenance on 12% of its kilns.

    02

    Value-Focused Growth and Market Dynamics

    The company's strategy emphasizes profitable growth and value creation, leading to an improved trade sales share from 74% to 78% of overall sales, with premium products comprising 34% of trade sales. While overall volumes saw a 2% Y-o-Y decline in trade and a 21% Y-o-Y decline in non-trade, this was a calculated move to reduce lower-margin volumes, particularly in the South. Management expressed confidence in achieving an 8% volume growth for FY27, citing an 8% improvement in trade volumes observed in July.

    03

    Structural Cost Leadership and Efficiency Gains

    ACC achieved a sequential reduction of ₹206 per metric ton in net operating cost, bringing it to ₹4,241 per metric ton, aligning with its FY27 target of ₹4,250/ton. This was driven by a 3% improvement in clinker factor to 64%, an 85% increase in blended cement share, and a ₹1/kWH reduction in unit power cost (from ₹5.9 to ₹4.9) due to increased RE and WHRS capacity. Further cost savings of ₹130-150 per ton are expected from initiatives like lead distance reduction (₹35/ton), raw material logistics optimization (₹30/ton), and energy efficiency.

    04

    Capacity Expansion and Project Timelines

    The company's expansion program is on schedule, aiming for an installed capacity of 119 million tons by the end of FY27. Trial runs have commenced at the 1.2 million tons Dahej cement capacity. The 2.4 million tons Salai Banwa (UP) and 1.2 million tons Bhatinda (Punjab) units have started, and the 2 million tons Jodhpur unit (from Penna acquisition) has been commissioned. The 1 million tons Kalamboli (Mumbai) and 2.4 million tons Warisaliganj (Bihar) expansions are expected in Q2 FY27, with the Maratha clinker line anticipated for Q1 FY28.

    05

    Green Energy Transition and Utilization

    ACC's RE power capacity has reached 973 megawatts, an increase of approximately 500 MW over the past year, with WHRS capacity at 228 megawatts. The company aims to increase its green power share from the current 48% (on a revenue plus consumption basis) to 60% by FY28. While 45 crore units were sold in Q1, the ultimate goal is 100% in-house consumption, with current sales being a temporary measure due to initial trading issues and ongoing grid connectivity programs for some plants, expected to be resolved progressively over the next 2-3 quarters.

    This is an AI-generated summary of a publicly available earnings call transcript.