Skip to content

    Orient Cement Limited

    ORIENTCEM
    Construction Materials·30 Jan 2026
    Management Summary

    Ambuja Cements delivered a strong Q3 FY26, significantly outperforming the industry in volume and revenue growth, driven by improved realizations and disciplined cost management. The company saw substantial EBITDA and PAT growth, supported by enhanced capacity utilization of acquired assets and strategic cost reduction initiatives. Despite some one-off expenses and project delays, Ambuja is on track with its ambitious capacity expansion plans and aims for further operational efficiencies and market share gains.

    Highlights

    6

    • Sales volume grew 17% YoY to 18.9 million tons, outperforming industry average by 2x.

    • Revenue increased 20% to ₹10,277 crores, supported by a ₹5 per bag improvement in realizations.

    • Adjusted PAT rose 258% to ₹378 crores, and adjusted Operating EBITDA increased 53% to ₹1,353 crores.

    • EBITDA per ton reached ₹718, a 31% increase, with December exit cost below ₹4,000 per ton.

    • Commissioned 2.4 MT Marwar Grinding Unit, increasing total capacity to 109 MTPA, with a target of 155 MTPA by March 2028.

    • Acquired assets utilization improved to 58% (Q3 average) and 65% (December exit), up 21% YoY.

    Concerns

    4

    • Q3 average cost per ton was ₹4,500, a ₹250 hike from Q2, attributed to one-off expenses like branding, O&M, and legal costs.

    • Delay of 3 months in Warisaliganj commissioning, pushing FY26 exit capacity target from 118 MTPA to 115 MTPA.

    • Unfortunate equipment failures at Tandur (Penna) and Jamul (ACC) plants impacted capacity utilization in Q3.

    • Sanghi plant faced operational challenges including flooding, storms, equipment damage, and low voltage transmission line issues in the past.

    What Changed3

    vs Q4 FY26

    Guidance items9 → 17 (+8)Risks discussed5 → 7 (+2)Q&A highlights8 → 6 (-2)
    Key financials

    Metrics

    14

    Periods

    2

    Headline

    13
    • Sales Volume
      18.9 MT
      YoY+17%
    • Revenue
      ₹10,277 Cr
      YoY+20%
    • Realization per bag
      ₹5
    • Adjusted PAT
      ₹378 Cr
      YoY+2.6%
    • Adjusted Operating EBITDA
      ₹1,353 Cr
      YoY+53%

    Q3 Avg

    1
    • Acquired Assets Utilization
      58%
      YoY+21%

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹10,000 crores

    Debt

    Gross ₹0 crores · Net ₹0 crores · 0.0x EBITDA

    M&A

    ACC and Orient Cement

    merger · announced

    M&A

    Sanghi and Penna assets

    acquisition · integrated

    Guidance & targets

    17
    CategoryTargetPriority
    Capacity
    Total Capacity
    115 MTPA
    		High
    Capacity
    Total Capacity
    155 MTPA
    		High
    Capacity
    Debottlenecking Capacity
    15 million tons
    		High
    Capacity
    Assam Greenfield Plant Commissioning
    18-24 months
    		Medium
    Cost
    Cost per ton
    INR3,650 per ton
    		High
    Cost
    Power Cost per unit
    INR4.5 per unit
    		High
    Cost Reduction
    Power Cost Reduction
    INR100-125 per ton
    		High
    Cost Reduction
    Fuel Cost Reduction
    INR150 per ton
    		High
    Cost Reduction
    Logistics Cost Reduction
    INR150 per ton
    		High
    Cost Reduction
    Raw Material Cost Reduction
    INR100 per ton
    		High
    Cost Reduction
    Total Cost Reduction
    INR300-350 per ton
    		High
    Renewable Energy
    Renewable Energy Capacity
    1,122 megawatts
    		High
    Market Mix
    Trade/Non-trade mix
    70%-30%
    		High
    Capacity Utilization
    Overall Utilization
    80%
    		High
    EBITDA
    EBITDA per ton (Acquired Assets)
    INR1,250-1,300 per ton, moving towards INR1,500 per ton
    		High
    Industry Demand Growth
    Industry Demand Growth
    8%
    		High
    Industry Demand Growth
    Industry Demand Growth
    8%
    		High

    Cost per ton (March 2026 exit)

    March 2026
    CurrentQ3 average ₹4,500, December exit below ₹4,000
    TargetBelow INR4,000 per ton

    Why it matters

    Verifying the sustained reduction in cost per ton, especially after one-off📎 Q3 expenses, is crucial for profitability.

    Therefore, exit of December already, as I said, we are below INR4,000 a ton... I'm giving exit of March, Jyoti.

    How to verify

    key_financials.metrics[label='Cost per ton']

    Risks & concerns

    7
    RiskSeverity

    One-off expenses impacting Q3 cost/ton

    Q3 average cost of ₹4,500 per ton included one-off expenses for branding, O&M, and legal costs, which will not recur in Q4. — Management acknowledged

    medium

    Equipment failures and plant downtime

    Unfortunate equipment failures occurred at Tandur (Penna) and Jamul (ACC) plants, impacting Q3 operations, but are expected to be operational soon. — Management acknowledged

    medium

    Delay in Warisaliganj commissioning

    Warisaliganj commissioning is delayed by 3 months, shifting the FY26 exit capacity target from 118 MTPA to 115 MTPA. — Management acknowledged

    low

    Higher lead distances impacting logistics cost

    Current lead distances are relatively higher compared to peers, but new assets coming online are expected to reduce this. — Management acknowledged

    medium

    Competitive pricing pressure in Central region

    The Central region experienced high aggression from competition, impacting pricing. — Management acknowledged

    medium

    Volatility in O&M costs due to actual booking

    Current accounting policy books O&M costs when they occur, leading to quarterly volatility; a new policy to amortize over 12 months will be implemented from next fiscal year. — Management acknowledged

    medium

    Operational challenges at Sanghi plant

    Sanghi, an island plant, faced issues like flooding, storms, equipment damage, and low-voltage transmission lines, which are being addressed through improvements and dredging. — Management acknowledged

    medium

    Q&A highlights

    6

    “So you're right that in the previous year quarter, Orient was not there. I can do the math. And Orient, if I exclude, that would come somewhere like 8%. And if I completely remove all the acquired assets and then if I go with the base capacities, Navin, that comes to in fact, that is a tad better than the industry, it comes to closer to around 6%, yes.”

    Analyst sought clarity on organic volume growth and whether focus on premiumization impacted overall volume, which management confirmed was slightly better than industry average for base capacities.

    asked by Navin Sahadeo, ICICI Securities

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Q3 FY26 Performance and Market Leadership

    Ambuja Cements delivered an industry-leading performance in Q3 FY26, with sales volumes growing 17% YoY to 18.9 million tons, double the industry average. This led to an improved market share of 16.6%. The company's revenue increased 20% to ₹10,277 crores, driven by a ₹5 per bag improvement in realizations. Adjusted PAT surged 258% to ₹378 crores, and adjusted Operating EBITDA grew 53% to ₹1,353 crores, with EBITDA per ton improving 31% to ₹718.

    02

    Capacity Expansion and Utilization Drive

    The company's total capacity now stands at 109 MTPA following the commissioning of the 2.4 MT Marwar Grinding Unit ahead of schedule. Ambuja aims to reach 115 MTPA by FY26 exit (revised from 118 MTPA due to a 3-month delay in Warisaliganj), 130-132 MTPA by FY27 exit, and an ambitious 155 MTPA by March 2028. Significant focus is on improving utilization of acquired assets, which saw an average of 58% in Q3 and exited December at 65%, up 21% YoY. The target is to achieve 80% utilization across all assets.

    03

    Aggressive Cost Optimization Initiatives

    Ambuja Cements continues its focus on cost leadership, targeting ₹3,650 per ton by March 2028. Q3 saw a 6% reduction in kiln fuel cost, a 15% reduction in power cost, and a 1% reduction in logistics costs. The share of green power increased to 37%. Management outlined specific reduction targets: ₹100-125 per ton for power, ₹150 per ton for fuel, ₹150 per ton for logistics, and ₹100 per ton for raw materials, totaling ₹300-350 per ton. The December exit cost was below ₹4,000 per ton, despite Q3 average being ₹4,500 due to one-off📎 expenses.

    04

    Integration of Acquired Assets and Strategic Growth

    The proposed amalgamation of ACC and Orient Cement with Ambuja Cements is a defining development, aiming to create a unified One Cement Platform for accelerated growth and operational excellence. The integration of Sanghi and Penna assets is progressing, with Sanghi operating at 80% clinker and 65% cement utilization by December exit. Penna's Tandur plant, which faced equipment failures, is expected to be operational by mid-February 2026, contributing to improved utilization. The company targets an EBITDA of ₹1,250-1,300 per ton, moving towards ₹1,500 per ton for acquired assets.

    05

    Renewable Energy and Digital Transformation

    The company's renewable energy footprint stands at almost 900 megawatts, with a target to reach 1,122 megawatts by FY27. This initiative aims to insulate against energy price volatility and significantly improve power costs. Digital intelligence is central to the operating model, with the launch of CiNOC (Cement Intelligent Network Operations Center) and various applications to enhance efficiency and productivity. These digital tools are expected to be a game-changer for the cement business.

    06

    Industry Outlook and Market Dynamics

    Management remains positive on industry demand, expecting an 8% growth for FY26, aligning with 1.1x GDP growth. Q4 is also projected to see around 8% demand growth, with leading players achieving double-digit growth. The company is strategically shifting its trade/non-trade mix towards 70%-30% (from 65%-35%), with January already reflecting this new mix. Infrastructure activity and sustained housing demand are key drivers for cement demand growth.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.