Sanghi Industrie

Ambuja Cements Limited, reporting for its group including Sanghi Industries, delivered a robust Q2 FY26 performance. Volume grew by 20% year-on-year to 16.6 million tons, significantly outpacing the industry's 4% growth. Revenue increased by 21% YoY to INR9,174 crores, supported by a 3% price gain and a 35% share of premium products in total trade sales. EBITDA per metric ton surged by 32% YoY to INR1,060, with the overall EBITDA reaching INR1,761 crores, a 58% YoY increase. Profit after tax stood at INR2,302 crores, up 364% YoY, which included a one-time^📎 tax write-back of INR1,697 crores.

The company is aggressively expanding its capacity, revising its target from 140 MTPA to 155 MTPA by FY28, with clinker capacity increasing from 84 million to 96 million tons. This includes adding 15 million tons through debottlenecking at a low capex of $48 per ton and commissioning new kilns. Several greenfield and brownfield projects, including Salai Banwa, BCCI, and Dahej, are slated for commissioning in Q3 FY26, contributing to an additional 11.2 million tons in FY26 and bringing total capacity to 118 million tons by year-end. The total capex program for the year is INR8,000 crores, with INR1,400 crores spent in Q2.

Significant cost reductions were achieved, with total costs decreasing by 5% YoY, leading to an INR238 per metric ton improvement. Kiln fuel cost, excluding AFR, was INR1.65 per 1,000-kilo calories, noted as the lowest among peers. Management targets further cost reductions to ~INR4,000 per metric ton by March '26, ~INR3,800 by March '27, and ~INR3,650 by March '28. Logistics costs also declined by 7% YoY to INR1,224, and the company aims for an additional 50 km reduction in lead distance through logistics debottlenecking.

The integration of acquired assets like Penna and Orient Cement is progressing well, with Sanghi Industries expected to move into a substantial positive zone from Q3 FY26. While these assets initially contributed lower EBITDA, management anticipates improved profitability with better capacity utilization. The company's market share increased by 1% to 16.6% and is targeted to reach 20-22% by FY28, driven by strong branding, digital marketing, and an expanded dealer network of 29,000 dealers and 7 lakh contractors. The RMX business is also ramping up, targeting 5% of total cement consumption by FY28.

Adani Cements launched CINOC (Cement Intelligent Network Operations Center) to enhance efficiency, productivity, and stakeholder engagement across its operations. The company is also committed to ESG goals, with Green Power share increasing to 33% in Q2 and targeting 60% by FY28, which is expected to reduce unit costs by INR1.5 (from INR6 to INR4.5). Renewable energy capacity is targeted to reach 900 MW by FY end and 1,122 MW by FY27. Initiatives like water positivity, plastic negativity, and tree plantations are ongoing, alongside community engagement programs.

Working capital saw an increase of approximately INR2,000 crores in the first half of the fiscal year, primarily due to higher receivables from B2B customers and increased inventory of finished goods, spares, and coal. Despite this, the company remains debt-free with a CRISIL AAA Stable rating. Cash and cash equivalents decreased from INR2,971 crores to INR1,813 crores in Q2, largely due to INR1,400 crores in capex spending during the quarter, which is part of an annual INR8,000 crores capex program.