Concall AI

ACC Limited — Q2 FY26 earnings call

Call held 3 Nov 2025

Management summary

Ambuja Cements reported a robust Q2 FY26, driven by strong volume growth of 20% YoY and significant cost reductions, leading to a 58% YoY increase in EBITDA to INR1,761 crores and an EBITDA/tonne of INR1,060. The company is aggressively expanding capacity to 155 MTPA by FY28 and implementing various efficiency initiatives, including debottlenecking, green power adoption, and digital transformation, despite some working capital increases and project delays due to weather.

Highlights

Sales volume of 16.6 million tons, up 20% YoY, significantly outperforming the industry average of 4%.
EBITDA increased by 58% YoY to INR1,761 crores, driven by strong volume growth and cost efficiencies.
EBITDA per metric ton reached INR1,060, a 32% YoY jump, with 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.
Total costs reduced by 5% YoY, with kiln fuel cost at INR1.65 per 1,000-kilo calories (excluding AFR), and green power share increased to 33%.

Concerns

Working capital increased by INR2,000 crores in H1 FY26 due to higher receivables from non-trade sales and increased inventory (coal, finished goods, spares).
Some project commissioning faced delays due to torrential rains and floods, though commercial operations are expected before Q4 FY26.
Acquired assets (Penna, Sanghi) currently exhibit lower EBITDA and utilization compared to existing assets, but are expected to improve.

Key financials

01 Revenue ₹9,174 Cr +21%YoY
02 Sales Volume 16.6 million tons +20%YoY
03 EBITDA ₹1,761 Cr +58%YoY
04 EBITDA/tonne 1,060 PMT +32%YoY
05 EBITDA Margin 19.2% +4.5%YoY
06 PAT ₹2,302 Cr +364%YoY
07 EPS ₹7.2 +267%YoY

What they filed

Q1 FY27: revenue down 4.6%, net profit down 60.8% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	4,634	5,972	6,115	6,087	6,005 +30%	6,483 +9%	7,146 +17%	5,808 −5%
Expenses	4,198	4,856	5,284	5,309	5,159	5,783	6,520	5,351
EBITDA	436	1,116	830	778	846 +94%	700 −37%	626 −25%	457 −41%
Margin	9%	19%	14%	13%	14%	11%	9%	8%
Other income	124	649	330	70	225	91	50	31
Interest	33	28	14	30	29	26	27	27
Depreciation	242	260	265	255	279	306	279	261
Profit before tax	284	1,476	882	563	763 +169%	460 −69%	370 −58%	200 −64%
Tax rate	30%	26%	15%	33%	-47%	12%	36%	26%
Net profit	200	1,092	751	375	1,119 +460%	404 −63%	238 −68%	147 −61%
EPS	10.63	58.14	39.99	19.99	59.60	21.52	12.69	7.83

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

Capex ₹1,400 Cr this quarter · ₹8,000 Cr (FY26) planned
- Debottlenecking for 15 million tons capacity 48 dollars per ton
- Greenfield and brownfield expansions (Salai Banwa, Marwar Mundwa, Penna Marwar, Dahej, Kalamboli, Bathinda, Jodhpur, Warisaliganj)
These debottlenecking initiatives across the plants will add 15 million tons in our capacity at a much lower capex of $48 per ton. And this capex is on an integrated investment basis. There were some questions I want to clarify. This $48 per ton is on an integrated basis, which would be in a combination of GU and IU investments. This is the combined capex for clinkerization plus grinding, as I mentioned. (Vinod Bahety, Page 3) So, INR1,400 crores was the capex in the second quarter and INR2,800 crores is for the first half, the capex? (Raashi, Page 15) Yes. So, my hit rate for average hit rate for the quarter is almost INR2,000-odd crores. And we hit almost INR8,000 crores of capex program in a year. So, that is right. (Vinod Bahety, Page 15)
Debt Net ₹0 Cr

company remains debt-free with highest rating of CRISIL AAA Stable and short-term Al plus ratings, we have maintained that. (Vinod Bahety, Page 4)
M&A Penna and Orient Cement Merger · Integrated

Fastest integration, sales under Ambuja/ACC brands, improved market presence.
Orient has best profitability, Penna picked up well, Sanghi to swing into positive zone from Q3.

Integration of Penna and Orient Cement has been of the fastest, I would say, wherein the entire sales, except the initial few days for Orient, otherwise, the entire sales has been under the Ambuja and ACC brands. This has been well received by the customers, (Vinod Bahety, Page 3) So, I think acquired assets are doing -- Orient has got one of the best like profitability and all within a short period of time and Penna has also picked up quite well. Sanghi is now going to swing into a very substantial positive zone from this Q3 in terms of capacity and therefore, like from overall performances. (Vinod Bahety, Page 13)
Liquidity Cash ₹1,813 Cr Closing cash of September was INR1,813 crores, down from INR2,971 crores (June) due to capex program.

If you please go to the Slide number 37, Raashi, over there, there's a bridge in terms of the starting point, which is INR10,125 crores and the closing cash of September, which is INR1,813 crores. (Vinod Bahety, Page 14) So, far as cash and cash equivalent is concerned from INR2,971 crores, majorly it is going in terms of the capex program. Almost INR1,400 crores is actually from capex program with respect to all these ongoing capex. (Vinod Bahety, Page 15)

Guidance & targets

Capacity

Total target capacity Capacity · FY28 · High confidence 155 MTPA

Previously 140 MTPA → 155 MTPA

With this additional 15 million tons, we now revise our target capacity from 140 to 155 by FY '28.

— Vinod Bahety
Clinker capacity Capacity · FY28 · High confidence 96 million tons

Previously 84 million tons → 96 million tons

Simultaneously, my clinker capacity also goes up from the current target of 84 million to almost 96 million tons by FY '28.

— Vinod Bahety
Total capacity Capacity · End of this financial year · High confidence 118 million tons

We are adding so almost 11.2 million tons in FY '26, and we will be hitting almost 118 million tons by end of this year.

— Vinod Bahety
Total capacity Capacity · FY27 · High confidence 130-135 million tons

Now for example, from 107 million tons, we are growing to 118 million tons by end of this financial year, then almost like around 130 million, 135 million tons by FY '27 and 155 million tons by FY '28.

— Vinod Bahety

Cost

Total cost per metric ton Cost · March '26 · High confidence INR4,000

From INR4,200 today

Exit of FY '26, we are targeting to deliver total cost of ~ INR4,000 per metric ton, which is 5% reduction from current levels of ~ INR4,200. The exit of September has been ~ INR4,200 cost per ton, which I'm targeting to deliver at INR4,000 by March '26.

— Vinod Bahety
Total cost per metric ton Cost · March '27 · High confidence INR3,800

Likewise, in FY '27, we aim for a 5% reduction and another 5% in FY '28. So, by end of March '27, we are aiming to hit INR3,800 a ton.

— Vinod Bahety
Total cost per metric ton Cost · March '28 · High confidence INR3,650

And by end of March '28, it would be around another 5%, which will be INR3,650 per ton.

— Vinod Bahety

Green Power

Green Power share Green Power · FY28 · High confidence 60%

Green Power share is up by 14.3% to almost 33% in Q2, and it is progressing very well. So, by FY '28 we should be hitting 60%, in line with our earlier announcements.

— Vinod Bahety

Cost Reduction

Unit cost reduction from Green Power Cost Reduction · FY28 · High confidence INR1.5 per unit

This will help me to achieved almost INR1.5 per unit cost reduction from my current levels of INR6 to almost it should be hitting INR4.5 by FY '28.

— Vinod Bahety

Logistics

Logistics lead distance reduction Logistics · Medium confidence 50-kilometer reduction

Logistics, the primary lead distance is down by, say, 2-kilometer and now stands at 265 kms, and we're expecting another 50-kilometer reduction as we expand our geography in terms of the GUs.

— Vinod Bahety

Carbon Credit

Additional income from Carbon Credit Carbon Credit · Medium confidence INR200-225 crores

As per my rough estimate, it should provide at least INR200 crores to INR225 crores additional income by virtue of positive Carbon Credit as and when this framework gets more mature.

— Vinod Bahety

Volume Growth

Overall yearly sales volume growth Volume Growth · High confidence 7-8%

My overall yearly target remains between 7% to 8%.

— Vinod Bahety

Market Share

Market share Market Share · FY28 · High confidence 20-22%

As of now, this quarter, we have increased by 1%, and our target is to hit almost 20% to 22% by FY '28

— Vinod Bahety

EBITDA/tonne

EBITDA/tonne EBITDA/tonne · FY28 · High confidence INR1,500

And target of FY '28, we had given our aim to achieve INR1,500 EBITDA.

— Vinod Bahety

RMX

RMX cement consumption as % of total capacity RMX · FY28 · High confidence 5%

So,5% of my full-blow capacity of cement RMX will consume, almost we are targeting 365-odd RMX plants in next couple of years. And good thing is now RMX has also built up quite well on the EBITDA margin as well. So, yes, around 5% by FY '28 for the cement consumption in RMX.

— Vinod Bahety

Market context

Double-digit growth Volume Growth · Many quarters from now · High confidence Double-digit

And I will be looking at double-digit growth for next many quarters from here.

— Vinod Bahety

What to watch in Q3 FY26

Total cost per metric ton

March '26

Current ~INR4,200 per ton (exit September)

Target INR4,000 per ton

Why it matters

This is a key profitability driver, and management has set aggressive reduction targets for the coming quarters.

The exit of September has been ~ INR4,200 cost per ton, which I'm targeting to deliver at INR4,000 by March '26.

Risks & concerns

Prolonged monsoons
medium

Despite headwinds from prolonged monsoons, the sector is expected to benefit from favorable policy measures.

Management acknowledged
Working capital increase
medium

Increase in working capital in H1 FY26 due to higher receivables from non-trade sales and increased inventory (coal, finished goods, spares).

Analyst acknowledged
Lower profitability/utilization of acquired assets
medium

Acquired assets (Penna, Sanghi) currently have lower EBITDA and utilization, but are expected to improve with capacity utilization and investments.

Management acknowledged
Project commissioning delays
low

Some projects faced delays due to torrential rains and floods, but commercial operations are expected before Q4 FY26.

Analyst acknowledged

Q&A highlights

7 direct

Drivers of cost reduction and working capital increase Direct

So, Amit, thank you. So, you are referring to so far as other expenses of INR774 a ton versus INR712 a ton. And this primarily, Amit, no, of course, the kilns have gone through maintenance and the benefits of the -- this maintenance will actually come in the coming quarters. Costs, for example, remains a focus area for us, Amit. And therefore, this reduction of almost INR62 per ton comes from the improved synergies and efficiency gains.

Clarifies the specific factors contributing to cost reduction (synergies, efficiency gains, maintenance benefits) and the reasons for working capital increase (receivables, inventory).

Asked by Amit Murarka

Details on clinker debottlenecking and locations Direct

Yes. Thank you, Navin. I think, debottlenecking in cement, first of all, we should know that how it happens. So, like some of our plants which are having the roller press and with sorry, with some of these plants which have the ball mills, for example, you actually put up a roller press also, which will complement with this ball mills, and that actually helps you to have a higher grinding capacity. So, that is like a simplified way of explaining the debottlenecking.

Provides technical insight into the debottlenecking process and identifies key locations like Bhatapara and potential for Sanghi, indicating future growth areas.

Asked by Navin Sahadeo

Sustainability of 20% volume growth and balancing pricing/volume Direct

Last quarter also, we delivered 20% year-on-year and this quarter also 20% year-on-year. Now in terms of sustainability, I think quite bullish to achieve double-digit growth may not be 20% when the acquired assets mature and therefore, the base goes up. But surely double-digit growth is what we are targeting on strength of the strong brands what we have with top of it, now the Adani brand also getting shipped into it.

Addresses investor concerns about the high volume growth rate, explaining how it will be sustained through brand strength and premium products, even as acquired assets mature.

Asked by Manish Somaiya

Financial impact and integration of acquired assets (Orient, Penna, Sanghi) Direct

I also highlighted, excluding the acquired assets, my EBITDA is almost at the base capacity at around almost INR1,189 per metric ton. But with the acquired assets, which have -- which are right now giving me lower EBITDA. So, let us say, the EBITDAs for Penna and Sanghi, for example, although there's an MSA and all. But with the capacity utilization improvement, they should also get closer to the current levels.

Explains the current lower profitability of acquired assets and outlines the strategy to improve their EBITDA/tonne through better capacity utilization and efficiency initiatives.

Asked by Manish Somaiya

Cash reduction bridge from June to September Partial

If you please go to the Slide number 37, Raashi, over there, there's a bridge in terms of the starting point, which is INR10,125 crores and the closing cash of September, which is INR1,813 crores... So, INR1,400 crores was the capex in the second quarter and INR2,800 crores is for the first half, the capex?

Clarifies that the significant cash outflow during the quarter was primarily driven by the ongoing capex program, providing context for the liquidity position.

Asked by Raashi

Impact of new technology on operational efficiency and plant age Direct

These technologies, for example, when we say latest technologies, they are all like the 4 million tons of clinker, for example, when you look at that, the heat factor, the heat consumption comes to almost 680-kilo calories, yes? And compared to that, for example, the existing heat consumption is almost like around 730 kilos to 740 kilos.

Details how the adoption of new technologies in capacity expansion will lead to lower heat and power consumption, directly contributing to improved operational efficiency and cost reduction.

Asked by Ritesh Shah

Project commissioning timelines and reasons for delays Direct

Again, for example, you have torrential rains and you have, what say, flood-like situations across many parts of the country. And therefore, for example, some of this has become a result of some of the factors of delays. But generally, like, for example, when I, for example, say anything operational, I look at commercial operationalizing of the plant more than basically trial run and all.

Explains that project delays are primarily due to external factors like weather (torrential rains/floods) but reassures that commercial operations are expected to begin before Q4 FY26.

Asked by Ritesh Shah

Discrepancy between consolidated and standalone EBITDA/tonne Direct

That is true. That is true, Pathanjali. Because, when you even that therefore, like look at the volume, you'll find individual companies will add up. If you simple add up, the volume will be higher. But when it comes to consol, the volumes get lower. Because in consol, the inter sale between the companies gets knocked off. And hence, this happens from arithmetic perspective.

Clarifies the accounting reason for the difference between consolidated EBITDA/tonne (INR1,060) and standalone figures for Ambuja (INR708) and ACC (INR900), attributing it to inter-company sales adjustments.

Asked by Pathanjali Srinivasan

3 min read 7 chapters

Detailed narrative

Robust Q2 FY26 Performance Driven by Volume and Cost Efficiency

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.

Aggressive Capacity Expansion and Debottlenecking Initiatives

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.

Strategic Cost Reduction and Green Power Adoption

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.

Integration of Acquired Assets and Market Share Growth

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.

Digital Transformation and Logistics Optimization

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.

Working Capital Management and Project Timelines

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.

ESG Focus and Human Capital Development

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.

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

View original transcript