ACC Limited

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.

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.

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.

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.

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.

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.