Sanghi Industrie

Sanghi Industrie delivered an industry-leading performance in Q3 FY26, with sales volumes growing at 2x the industry average. The company achieved its highest ever quarterly sales volume of 18.9 million tons, marking a 17% year-on-year increase and boosting market share to 16.6%. Normalized revenue reached ₹10,277 crores, up 20% YoY, driven by a ₹5 per bag improvement in realizations. Profitability saw a significant surge, with PAT jumping 258% to ₹378 crores and operating EBITDA increasing 53% to ₹1,353 crores, translating to an EBITDA per ton of ₹718, up 31% YoY.

The quarter was strategically important with the proposed amalgamation of ACC and Orient Cement with Ambuja Cements, forming a unified One Cement Platform aimed at accelerating growth and enhancing efficiency. The company commissioned a 2.4 million tons Marwar Grinding Unit ahead of schedule, bringing total capacity to 109 MTPA. Further, 15 million tons of debottlenecking capacity is being unlocked at lower capex, contributing to the target of 155 MTPA by March '28. Despite a 3-month delay in Warisaliganj commissioning, the company expects to exit March '26 with 115 MTPA.

Sanghi Industrie continued its focus on cost leadership, achieving visible year-on-year reductions across the value chain. Kiln fuel costs declined by 6%, power costs reduced by 15%, and logistics costs saw a 1% reduction. The share of green power increased by 15% to 37%, with a target to reach 1,122 megawatts by FY27 for long-term energy price insulation. Management aims to reduce power consumption by 10-12 units per ton, targeting a ₹100-125/ton reduction in power costs, and overall cost per ton to ₹3,650 by March '28.

The integration and optimization of acquired assets like Sanghi and Penna showed early operational success. Capacity utilization for acquired assets improved meaningfully to 58%, with an exit December utilization of 65%. Sanghi's clinker operations reached 80% utilization, and cement operations hit 65% by December. Penna is also showing healthy improvement, with its commissioning targeted for February. Management is addressing specific challenges at these sites, such as equipment failures and infrastructure improvements, to enhance their overall efficiency and contribution.

The operating environment remained favorable, with cement demand driven by infrastructure activity, sustained housing demand, and rural construction recovery. Pricing entered January on firmer ground, with double-digit volume growth. Southern markets saw price increases of ₹15-20 per bag, while Northern markets experienced ₹10-15 increases. The company's focus on premiumization and mix improvement, along with stronger market execution, helped capture significantly higher market share and better realizations. The trade-non-trade mix is shifting towards a target of 70%-30%, with January already achieving this ratio.

The company maintains a strong financial position, remaining debt-free with CRISIL and CARE AAA stable and A1+ ratings. Net worth stands at approximately ₹69,854 crores. Capex for FY26 is estimated at a ballpark of ₹9,000 crores, allocated for both growth (₹8,000 crores) and efficiency (₹2,000 crores) initiatives. Management emphasized a modular approach to capex, prioritizing capacity utilization of existing assets and strategic investments in new units and debottlenecking.

Sanghi Industrie continues to advance its ESG and digitalization agenda. The company launched CiNOC (Cement Intelligent Network Operations Center), an AI-enabled central control system, to drive efficiency and productivity. Efforts in decarbonization include the commercial-scale installation of Coolbrooks RDH technology for kiln electrification and a pilot carbon capture project. The company has also become the first Indian cement company to adopt the TNFD framework, aligning with global benchmarks for nature-related disclosures.