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    Ambuja Cements

    AMBUJACEM
    Construction Materials·3 Nov 2025
    Management Summary

    Ambuja Cements delivered a robust Q2 FY26 performance, driven by strong volume growth, improved realizations, and significant cost optimization initiatives. The company reported substantial increases in revenue, EBITDA, and PAT, alongside strategic capacity expansion and debottlenecking efforts. Management expressed confidence in achieving aggressive cost reduction and capacity targets, while also integrating acquired assets and enhancing market share.

    Highlights

    8
    • Revenue stood at ₹9,174 crores, marking a 21% YoY increase.

    • Sales volume reached 16.6 million tons, up 20% YoY, significantly outpacing the industry average of 4%.

    • EBITDA surged by 58% YoY to ₹1,761 crores, with EBITDA per metric ton at ₹1,060.

    • EBITDA margin expanded to 19.2%, an uptick of 4.5 percentage points from 14.7% last year.

    • Profit After Tax (PAT) grew by 364% YoY to ₹2,302 crores, and EPS increased by 267% to ₹7.2 per share.

    • Existing capacity increased to 107 MTPA, with a revised target of 155 MTPA by FY28.

    • Total cost per metric ton is targeted to reduce to ₹4,000 by March '26, ₹3,800 by March '27, and ₹3,650 by March '28.

    • Green Power share in Q2 was 33%, with a target to reach 60% by FY28.

    What Changed2

    vs Q3 FY26

    Guidance items14 → 13 (-1)Risks discussed6 → 2 (-4)

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue₹9,174 Cr+21%YoY
    2. 02Sales Volume16.6 MT+20%YoY
    3. 03EBITDA₹1,761 Cr+58.0%YoY
    4. 04EBITDA per metric ton₹1,060
    5. 05EBITDA Margin19.2%+30.6%YoY

    Capital allocation

    5
    high confidence
    CategoryHeadline
    Capex

    ₹1,400 crores this quarter · ₹8,000 crores (FY26) planned

    Debt

    Gross ₹0 crores · Net ₹0 crores

    M&A

    Penna and Orient Cement

    acquisition · integrated

    M&A

    Sanghi Industries

    acquisition · integrated

    Liquidity

    Cash ₹1,813 crores

    Cash and cash equivalents reduced from ₹2,971 crores to ₹1,813 crores between June and September, primarily due to capex programs.

    Guidance & targets

    12
    CategoryTargetPriority
    Cost
    Total Cost per metric ton
    INR4,000
    High
    Cost
    Total Cost per metric ton
    INR3,800
    High
    Cost
    Total Cost per metric ton
    INR3,650
    High
    Capacity
    Total Cement Capacity
    155 MTPA
    High
    Capacity
    Clinker Capacity
    96 million tons
    High
    Green Power
    Green Power Share
    0.60
    High
    Cost Reduction
    Unit Cost Reduction from Green Power
    INR1.5 per unit
    High
    Logistics
    Lead Distance Reduction
    50 kilometers
    Medium
    RMC Business
    Cement Consumption in RMX
    0.05
    High
    EBITDA
    EBITDA per metric ton (for acquired assets)
    INR1,500
    High
    Market Share
    Market Share
    0.20 to 0.22
    High
    Other Income
    Additional Income from Carbon Credit
    INR200-225 crores
    Medium

    Total Cost per metric ton

    March '26
    Current~INR4,200 (exit September)
    TargetINR4,000

    Why it matters

    This is a key profitability driver, and management has set an aggressive target for cost reduction by the end of the fiscal year.

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

    How to verify

    guidance_and_targets[metric='Total Cost per metric ton'][target_period='March \'26']

    Risks & concerns

    2
    RiskSeverity

    Prolonged Monsoons

    Despite headwinds from prolonged monsoons, the sector is expected to benefit from favorable policy measures like GST 2.0 reforms.Management acknowledged

    low

    Project Commissioning Delays

    Some project delays were attributed to external factors like torrential rains and flood-like situations, but management expects commercial production to start before Q4.Both downplayed

    low

    Q&A highlights

    8

    “So, yes, Amit, so far as Q2 is concerned, there are two factors. One is, yes, receivables, when you have a higher degree of sales on the non-trade side, and Q2 being generally subdued given the monsoon and all. This tends to increase your overall receivables to the B2B customers. Second is the overall inventory. And somewhere you will find our response is that, there is a higher closing stock of both finished goods.”

    Management explained the increase in working capital due to higher receivables from non-trade sales and increased inventory, particularly finished goods, during the monsoon-subdued Q2.

    asked by Amit Murarka

    3 min read7 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Highlights

    Ambuja Cements reported a robust Q2 FY26, with revenue growing 21% YoY to ₹9,174 crores. Sales volume increased by 20% YoY to 16.6 million tons, significantly outperforming the industry average of 4%. This strong performance was attributed to concerted branding, marketing, and increased customer preference for premium products, which now constitute 35% of total trade sales. EBITDA surged 58% YoY to ₹1,761 crores, translating to an EBITDA per metric ton of ₹1,060 and an expanded EBITDA margin of 19.2%.

    02

    Cost Optimization and Efficiency Initiatives

    The company achieved a cost reduction of ₹238 per metric ton YoY, primarily driven by lower kiln fuel costs, which stood at ₹1.65 per 1,000-kilo calories (excluding AFR). Management targets further cost reductions, aiming for a total cost of ₹4,000 per metric ton by March '26, ₹3,800 by March '27, and ₹3,650 by March '28. Logistics costs also decreased by 7% YoY to ₹1,224, supported by a 2-kilometer reduction in primary lead distance to 265 kms. The company is also building 2-3 months of coal inventory to sustain low costs.

    03

    Capacity Expansion and Debottlenecking Strategy

    Ambuja Cements' existing capacity reached 107 MTPA, with a revised target of 155 MTPA by FY28, up from the previous 140 MTPA. This expansion includes an additional 15 million tons through debottlenecking at a capex of $48 per ton on an integrated basis. Clinker capacity is also targeted to increase from 84 million tons to 96 million tons by FY28, with three new kilns contributing approximately 12 million tons. Several greenfield and brownfield expansions, including Salai Banwa, Dahej, and Jodhpur, are progressing for commissioning by the end of the financial year.

    04

    Green Power and ESG Initiatives

    The share of Green Power in the energy mix increased to 33% in Q2, up 14.3% YoY, with a target to reach 60% by FY28. This is expected to reduce unit costs by ₹1.5 per unit, from ₹6 to ₹4.5, by FY28. The company is also focusing on ESG improvements, including being 12x water positive and plastic negative. Additionally, initiatives like the Cement Intelligent Network Operations Center (CINOC) are being implemented to enhance efficiency and productivity across the value chain.

    05

    Market Share and Brand Building

    The company's market share increased by 1% to 16.6% in Q2, with a target to reach 20-22% by FY28. This growth is supported by concerted branding and marketing efforts, including digital and mass media campaigns reaching 300 million individuals. The RMC business contributed 4.5% to revenues in H1, up from 4% in FY25, with a target for cement consumption in RMX to reach 5% of full-blow capacity by FY28. The company also continues to engage with contractors and academia to strengthen its ecosystem.

    06

    Acquired Assets Integration and Performance

    The integration of Penna and Orient Cement has been rapid, with sales now largely under Ambuja and ACC brands. While acquired assets currently have lower EBITDA, management expects their profitability to improve with capacity utilization, targeting an EBITDA of ₹1,500 per metric ton for these assets by FY28. Sanghi Industries is also expected to achieve a substantial positive zone from Q3, leveraging its potential to become a low-cost clinker producer.

    07

    Working Capital and Liquidity Management

    Cash and cash equivalents decreased from ₹2,971 crores to ₹1,813 crores between June and September, primarily due to ongoing capex programs, which amounted to ₹1,400 crores in Q2 and ₹2,800 crores in H1. The company maintains a debt-free status with a CRISIL AAA Stable rating. The increase in working capital was attributed to higher receivables from non-trade sales and increased inventory, including finished goods, during the monsoon-affected quarter.

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