ACC

Ambuja Cements reported a strong Q2 FY26 with sales volume growing 20% YoY to 16.6 million tons, significantly outpacing the industry average of 4%. This robust performance, coupled with a 5% YoY reduction in total costs, led to a 58% YoY increase in EBITDA to INR1,761 crores. EBITDA per metric ton jumped 32% YoY to INR1,060, with the EBITDA margin expanding by 4.5% to 19.2%. Profit After Tax (PAT) surged 364% YoY to INR2,302 crores, including a one-time^📎 profit provision for tax write-back of INR1,697 crores.

The company has revised its total target capacity to 155 MTPA by FY28, up from the previous 140 MTPA, and clinker capacity to 96 million tons by FY28. This expansion includes an additional 15 million tons through debottlenecking at a low capex of $48 per ton, which is an integrated investment for clinkerization and grinding. Furthermore, 11.2 million tons are expected to be added in FY26, bringing total capacity to 118 million tons by the end of the financial year, with greenfield and brownfield expansions progressing well.

Ambuja Cements is targeting a total cost reduction to INR4,000 per metric ton by March '26, further reducing to INR3,800 by March '27 and INR3,650 by March '28. This is supported by a kiln fuel cost of INR1.65 per 1,000-kilo calories (excluding AFR) and an increasing share of green power, which reached 33% in Q2, up from 14.3% last year. The company aims to hit 60% green power share by FY28, which is expected to result in a INR1.5 per unit cost reduction from current levels of INR6 to INR4.5.

The integration of Penna and Orient Cement has been rapid, with sales now operating under Ambuja and ACC brands. While acquired assets currently have lower EBITDA and utilization compared to existing assets, management expects their profitability to improve with better capacity utilization and ongoing investments. The company's market share increased by 1% this quarter to 16.6% and is targeted to reach 20-22% by FY28, driven by concerted branding, marketing, and supply chain initiatives.

Ambuja Cements has launched CINOC (Cement Intelligent Network Operations Center) to drive efficiency, productivity, and deeper engagement across its value chain. Additionally, logistics debottlenecking initiatives are underway, expected to improve current capacity utilization by 3% and enable better evacuation of 3 million tons from the current 107 million tons. The company also plans to install 13 blenders over 12 months to optimize product mix and increase premium cement share.

The company experienced an increase of INR2,000 crores in working capital during H1 FY26, primarily due to higher receivables from non-trade sales and increased inventory of coal, finished goods, and spares. While some project commissioning, such as Bhatapara clinker line and Krishnapatnam grinding unit, faced delays due to torrential rains and floods, management expressed confidence that commercial operations for these projects would commence before Q4 FY26.

Ambuja Cements is committed to ESG improvements, achieving 12x water positive status and plastic negative operations. The company estimates an additional income of INR200-225 crores from positive carbon credits as the framework matures. In terms of human capital, the average age of employees has improved to 38 years, with significant investment in training 1,300 GTs and DTs, contributing to improved productivity and a younger workforce.