ACC Limited — Q4 FY25 earnings call

Call held 29 Apr 2025

Management summary

Ambuja Cement reported a strong Q4 FY25, with consolidated revenue up 11% to INR 9,889 crores and EBITDA per ton reaching INR 1,001. The company achieved a significant milestone by crossing 100 million tons of cement capacity in just 30 months and is on track for 118 MTPA by FY26 and 140 MTPA by FY28. Cost optimization efforts, including a 14% reduction in kiln fuel cost and 2% in logistics costs, contributed to improved profitability, while the company also secured INR 10,125 crores in cash and cash equivalents.

Highlights

  • Consolidated Q4 FY25 Revenue of INR 9,889 crores, up 11% Y-o-Y, driven by strong micro market management and ground network expansion.

  • Consolidated Q4 FY25 EBITDA of INR 1,868 crores, with EBITDA per ton of INR 1,001 and an EBITDA margin of almost 19%.

  • Achieved the significant milestone of crossing 100 million tons of cement capacity in just 30 months.

  • Kiln fuel cost reduced by 14% to INR 1.58 per 1,000 kilo calories, and transportation cost declined 2% to INR 1,238 per ton due to better fuel management and logistics optimization.

  • Consolidated cash and cash equivalent stood at INR 10,125 crores as on March 31, 2025, with the company remaining debt-free and having a net worth of INR 64,000 crores.

  • ACC became India's first large-scale cement company with science-based net zero targets validated by SBTi.

Concerns

  • Impairment of old clinker units (Bargarh, Chaibasa, Wadi line number 1) totaling around INR 200 crores, deemed unfeasible.

  • Sanghi Industries ramp-up is "a few months behind" target due to initial maintenance issues like refractory linings.

Key financials

  1. Revenue ₹9,889 Cr +11%YoY
  2. Operational Cost per Ton ₹4,104
  3. Kiln Fuel Cost 1.58 Rs per 1000 kcal -14%YoY
  4. Transportation Cost per Ton ₹1,238 -2%YoY
  5. EBITDA ₹1,868 Cr
  6. EBITDA Margin 19%
  7. EBITDA per Ton ₹1,001
  8. Annual Revenue FY25 ₹35,045 Cr
  9. Annual Operational Cost per Ton FY25 ₹4,275
  10. Annual EBITDA FY25 ₹5,971 Cr
  11. Annual EBITDA per Ton FY25 ₹915
  12. Consol Cash & Cash Equivalent ₹10,125 Cr
  13. Net Worth ₹64,000 Cr
  14. Premium Product Share 29.1%
  15. Green Power & Power Mix 26%

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,634 5,972 6,115 6,087 6,005 +30%6,483 +9%7,146 +17%5,808 −5%
EBITDA436 1,116 830 778 846 +94%700 −37%626 −25%457 −41%
Net profit200 1,092 751 375 1,119 +460%404 −63%238 −68%147 −61%
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

high confidence
  • Capex ₹9,000 Cr self-funded
    • Growth capex for 18 million tons cement capacity, clinker units (Bhatapara, Maratha, Marwar Mundwa, Mundra petchem), grinding units (Warisaliganj, Naultha, Salai Banwa, Bhatinda, Raigarh) ₹6,000 Cr
    • Efficiency capex for WHRS and BCFC rakes ₹2,500 Cr
    Sumangal, in terms of capex, let us say the growth capex is closer to around INR6,000 crores. And so far as my efficiency capexes are concerned, let us say, between INR2,500 crores to INR3,000-odd crores, so we are looking at closer to, say, INR9,000-odd crores. Some of them are discrete and some of them are ongoing.
  • Debt Gross ₹0 Cr · Net ₹0 Cr
    Point number two, we still remain debt-free.
  • M&A Orient Cement Acquisition · Closed · Consideration ₹[object Object] (cash)

    Part of growth strategy to achieve 140 MTPA capacity

    So far as the overall cash flow is concerned post Orient, and as you know, that Orient, we have acquired 46% at closer to overall outflow of around INR5,500 crores, INR5,600 crores.
  • M&A Sanghi Industries Acquisition · Integrated

    Part of growth strategy to achieve 140 MTPA capacity, considered a cost-efficient asset and future clinker hub.

    Ramp-up a few months behind target due to maintenance issues, but both kilns are now operational with significant ramp-up expected.

    So far as Sanghi is concerned, you are right that compared to our own target, we may be a few months behind because more so that it's an island plant, and therefore, we will have to take care of some of the requirements in terms of the power and in terms of the dredging. And these, like, plants have been, like, not so well maintained. So it has gone into refractory linings and so on and so forth, I think. But as of now, both the kilns are up and running, and you will see a significant -- already I'm seeing it in the month of April. Sanghi for me is one of the best assets in terms of the cost. It will be my jewel, I tell you, in terms of the overall clinker cost. It will be my hub of clinker.
  • M&A Penna Cement Acquisition · Integrated

    Part of growth strategy to achieve 140 MTPA capacity.

    Clinker utilization at 75-80%, cement capacity utilization lower due to sluggish South markets.

    Penna, I would say we are so happy with the assets of Penna. In terms of my clinker utilization, it is almost 75% to 80%. So far as cement is concerned, the south markets have been sluggish. Therefore, in terms of cement capacity, it may be a little lower than what the clinker capacity has been -- utilization has been. But clinker is doing great from Penna perspective.
  • Liquidity Cash ₹10,125 Cr Post Orient acquisition outflow of INR 5,500-5,600 crores, the company still has approximately INR 5,000 crores of cash, which is being augmented by improved operating performance and incentives/taxes.
    As on 31st of March '25, the consol cash and cash equivalent stands at INR10,125 crores.

Guidance & targets

Profitability

  • EBITDA per ton Profitability · FY28 · High confidence INR 1,500
    this INR915 is for the year, but now our journey anyway is going to be towards achieving INR1,500 EBITDA per ton by FY '28.

    — Vinod Bahety

Cost

  • Cost per ton Cost · FY28 · High confidence INR 3,650
    Friends, as you know, we have put our commitments to achieve INR3,650 per ton of cost by FY '28.

    — Vinod Bahety

Cost Reduction

  • Cost savings per ton Cost Reduction · FY26 · High confidence INR 100
    INR100 per ton savings expected in fiscal '26 and another INR150 in fiscal '27. So that's broadly on track, right? That's absolutely broadly on track.

    — Vinod Bahety

  • Cost savings per ton Cost Reduction · FY27 · High confidence INR 150

    — Vinod Bahety

Capacity

  • Cement capacity Capacity · FY26 · High confidence 118 MTPA
    Sooner, we should be also announcing additional grinding units to be commissioned in Q1, primarily Sankrail and Sindri. And with every prospective quarters, we should be hitting 118 million metric tons by end of this financial year.

    — Vinod Bahety

  • Cement capacity Capacity · FY28 · High confidence 140 MTPA
    Our growth journey continues as we aim for 118 million tons by FY '26 and 140 million tons by FY '28 through largely this time driven by organic expansions.

    — Vinod Bahety

Renewable Energy

  • Renewable energy capacity Renewable Energy · Q2 FY26 · High confidence 1,000 MW
    Already 200 megawatts of solar and close to 100 megawatts of energy has been delivered by March '25, and the full gigawatt will get commissioned by quarter 2 of financial year '26.

    — Rakesh Tiwary

WHRS Capacity

  • WHRS capacity as % of total capacity WHRS Capacity · by '26 · High confidence 30%
    And down the line, we are targeting to achieve 30%, including all the new projects at 140 million capacity, 30% to be WHRS.

    — Vinod Bahety

Logistics

  • Lead distance reduction Logistics · Medium confidence 170 km

    From 265 km today

    We are targeting to reduce the lead distance by almost by about 100 kilometers to 170 kilometers.

    — Vinod Bahety

Premium Products

  • Premium cement share Premium Products · FY26 · High confidence 35%

    From 29.1% today

    Our target for FY '26 is around 35% on the premium cement.

    — Vinod Bahety

Industry Demand

  • Cement demand growth Industry Demand · FY26 · Medium confidence 8%
    And we are expecting that it will have a continued improvement and reach, say, 8% overall demand growth for FY '26.

    — Vinod Bahety

  • Industry demand CAGR Industry Demand · up to 2030 · Medium confidence 7-7.5%
    So, Ritesh, I will actually stretch myself to, let us say, up to 2030. And to me, industry supply will be at, say, 6% CAGR while demand will be at 7% to 7.5% CAGR.

    — Vinod Bahety

Industry Supply

  • Industry supply CAGR Industry Supply · up to 2030 · Medium confidence 6%
    So, Ritesh, I will actually stretch myself to, let us say, up to 2030. And to me, industry supply will be at, say, 6% CAGR while demand will be at 7% to 7.5% CAGR.

    — Vinod Bahety

Industry Capacity

  • Cement capacity Industry Capacity · by 2030 · Medium confidence 950 million tons
    So these are like we should be targeting to, let us say, hit around, say, 950 million tons of cement capacity by 2030.

    — Vinod Bahety

AFR Utilization

  • AFR utilization at business level AFR Utilization · Medium confidence 75%
    And I told you, we are targeting around 75% at the overall, say, business level.

    — Vinod Bahety

What to watch in Q1 FY26

Sanghi Industries Capacity Utilization

Next quarter
Current 40-45% (FY25 exit), 'a few months behind' target
Target Significant ramp-up, higher utilization

Why it matters

Key to realizing full value from acquisition and achieving 140 MTPA target.

So far as Sanghi is concerned, you are right that compared to our own target, we may be a few months behind because more so that it's an island plant, and therefore, we will have to take care of some of the requirements in terms of the power and in terms of the dredging. And these, like, plants have been, like, not so well maintained. So it has gone into refractory linings and so on and so forth, I think. But as of now, both the kilns are up and running, and you will see a significant -- already I'm seeing it in the month of April.

Risks & concerns

  • Impairment of Old Clinker Assets

    low

    The company proactively provided for approximately INR 200 crores for old clinker units (Bargarh, Chaibasa, Wadi line number 1) that were deemed unfeasible.

    Management acknowledged

  • Delay in Sanghi Industries Ramp-up

    low

    The ramp-up of Sanghi Industries is a few months behind target due to initial maintenance issues, but both kilns are now operational, and a significant ramp-up is expected in April.

    Management acknowledged

Q&A highlights

7 direct
Cost Optimization Journey and Guidance Direct
Achieved already around INR150 to INR175 per ton of cost and the balance INR300 to INR325 per ton is what we are going to expect in FY '26 to up to '28. ... INR100 per ton savings expected in fiscal '26 and another INR150 in fiscal '27. So that's broadly on track, right? That's absolutely broadly on track.

Confirms the company's progress on significant cost reduction targets and reaffirms future guidance, which is crucial for profitability.

Asked by Rahul Gupta

ACC Investments, Land Purchase, and Asset Impairment Direct
Overall, for example, in terms of ACC, there has been an outgo of, say, almost INR1,100 crores in terms of the cash balance from INR4,660 crores to INR3,590 crores. ... this have been invested especially for the land in the western side of the country where we have plans to set up the grinding units and also acquire the we have acquired the coal mines. ... some of the old assets, which are clinker units, but we find now unfeasible are like Bargarh, Chaibasa and the Wadi line number 1, so which we have decided right now to put them off. And therefore, proactively, we are providing for those assets.

Clarifies significant capital deployment by ACC for strategic growth (land for grinding units/coal mines) and explains the rationale behind the ~INR 200 crore impairment of old, unfeasible assets.

Asked by Amit Murarka

Ramp-up of Acquired Units (Penna and Sanghi) Partial
Penna, I would say we are so happy with the assets of Penna. In terms of my clinker utilization, it is almost 75% to 80%. ... So far as Sanghi is concerned, you are right that compared to our own target, we may be a few months behind because more so that it's an island plant, and therefore, we will have to take care of some of the requirements in terms of the power and in terms of the dredging. ... But as of now, both the kilns are up and running, and you will see a significant -- already I'm seeing it in the month of April.

Provides an update on the integration and operational performance of key acquisitions, highlighting challenges with Sanghi's ramp-up but also positive progress.

Asked by Navin Sahadeo

FY26 Capex Breakdown Direct
Sumangal, in terms of capex, let us say the growth capex is closer to around INR6,000 crores. And so far as my efficiency capexes are concerned, let us say, between INR2,500 crores to INR3,000-odd crores, so we are looking at closer to, say, INR9,000-odd crores.

Offers a clear breakdown of the significant capital expenditure planned for FY26, distinguishing between growth and efficiency-driven investments.

Asked by Sumangal Nevatia

Impact of Old Clinker Plant Dismantling on Capacity Targets Direct
Wadi I, it is around, say, 1 million tons. So far as Bargarh is concerned, also like 1 million. And so far as Chaibasa is concerned, around 0.6 million. So altogether, say, 2 or 2.5 million. And when we say 89 million for FY '28, this is already after factoring in this -- basically reduction of these capacities. This is part of the whole plan of 140 million tons journey.

Clarifies that the planned dismantling of old, unfeasible clinker capacity (approx. 2.6 MT) has already been factored into the company's future capacity targets, ensuring transparency on growth projections.

Asked by Ashish Jain

Industry Demand-Supply Outlook Direct
So, Ritesh, I will actually stretch myself to, let us say, up to 2030. And to me, industry supply will be at, say, 6% CAGR while demand will be at 7% to 7.5% CAGR. And therefore, I am at least bullish in terms of demand outpacing supplies. And therefore, we should have a good level of capacity utilization and holding up of the prices with a positive uptick.

Provides management's long-term view on the cement industry's demand-supply dynamics, indicating a favorable environment for capacity utilization and pricing.

Asked by Ritesh Shah

Pan-India Pricing Trends and Regional Dynamics Direct
So prices in last 4 months, I will say that there's a good momentum backed by a buoyancy in the demand in the government capex spending and overall, say, consumption markets of the cement. ... South market saw substantial fall. Therefore, the delta will be a little higher and better in terms of percentage. But overall, at the country level, if you take a weighted average, we are seeing a good healthy traction on the prices.

Offers a detailed perspective on recent pricing improvements across different regions and the underlying demand drivers, providing insights into market conditions.

Asked by Pankaj Tibrewal

EBITDA/ton Comparison with Peers and Margin Improvement Strategy Direct
Like in terms of Dalmia, if you have seen, since you have specifically highlighted his name. So like you will know that Dalmia's overall ratio on the AFR and WHRS, especially on the AFR, they have a very healthy ratio. And the cost of fuel, therefore, for them is an advantage, which is a matter of time for us also now that we are already having a pipeline of all the AFR assets. And I told you, we are targeting around 75% at the overall, say, business level.

Addresses competitive positioning in terms of EBITDA/ton and outlines the strategy to improve margins by focusing on AFR and WHRS, similar to best-in-class peers.

Asked by Hiten Boricha

3 min read 6 chapters

Detailed narrative

Strong Financial Performance & Capacity Milestone

Ambuja Cement reported robust Q4 FY25 results, with consolidated revenue growing 11% year-on-year to INR 9,889 crores. The company achieved an EBITDA of INR 1,868 crores, translating to an EBITDA per ton of INR 1,001 and an EBITDA margin of almost 19%. For the full FY25, the company recorded its highest-ever annual revenue of INR 35,045 crores and an EBITDA of INR 5,971 crores, with an EBITDA per ton of INR 915. A significant milestone was achieved by crossing 100 million tons of cement capacity in just 30 months, positioning the company as the ninth largest globally.

Aggressive Capacity Expansion Plans

The company is on an accelerated growth path, targeting 118 million tons per annum (MTPA) by FY26 and 140 MTPA by FY28, primarily through organic expansions. Key projects for FY26 include commissioning grinding units at Sankrail and Sindri in Q1, Salai Banwa in Q2, Kalamboli expansion and brownfield expansions at Bhatinda, Marwar, Dahej, and Jodhpur in Q3. Additionally, a 4 MTPA clinker unit at Maratha and a grinding unit at Warisaliganj are expected by the end of FY26. The overall capex for FY26 is projected to be around INR 9,000 crores, with INR 6,000 crores for growth and INR 2,500-3,000 crores for efficiency.

Comprehensive Cost Optimization Initiatives

ACC is rigorously pursuing cost leadership, aiming for a cost of INR 3,650 per ton by FY28. Significant progress has been made, with INR 150-175 per ton cost reduction already achieved, and targets of INR 100/ton savings for FY26 and INR 150/ton for FY27 are on track. Kiln fuel cost decreased by 14% to INR 1.58 per 1,000 kilo calories, and transportation costs declined 2% to INR 1,238 per ton. Initiatives include increasing green power usage (up to 26% from 15.6%), deploying GPWIS and BCFC rakes for efficient logistics, and securing 367 million tons of new limestone reserves.

Acquisition Integration and Performance

The integration of recent acquisitions like Sanghi Industries and Penna Cement is progressing. While Sanghi's ramp-up is "a few months behind" schedule due to initial maintenance issues, both kilns are now operational, with significant ramp-up expected in April. Penna's clinker utilization is strong at 75-80%, though cement utilization is lower (45-50%) due to sluggish South markets. The company considers Sanghi a cost-efficient asset and a future "hub of clinker," expecting significant capacity utilization this year.

Strong Balance Sheet and Capital Allocation

The company maintains a robust financial position, reporting a debt-free status and a net worth that climbed to INR 64,000 crores from INR 50,000 crores a year ago. Cash and cash equivalents stood at INR 10,125 crores as of March 31, 2025. Post the Orient acquisition outflow of INR 5,500-5,600 crores, the company still holds approximately INR 5,000 crores of cash. The planned FY26 capex of approximately INR 9,000 crores is expected to be self-funded, ensuring continued financial strength without external debt.

Market Outlook and Premium Product Focus

Management expressed a positive outlook for the cement industry, projecting 7-7.5% CAGR demand growth against 6% CAGR supply growth up to 2030, leading to improved capacity utilization and pricing. The company's focus on premium products is yielding results, with the share of premium cement in trade sales increasing to 29.1% (up from 5.3%). The target is to further grow this to 35% by FY26, leveraging the INR 200-300 per ton extra realization these products offer.

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