Sanghi Industrie — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Sanghi Industrie reported a strong Q3 FY26, achieving record volumes and significant growth in revenue, PAT, and EBITDA, driven by market execution and cost optimization. The company is progressing with its capacity expansion and integration of acquired assets, despite some one-off cost increases and minor project delays. Management remains bullish on future growth and efficiency improvements.

Highlights

  • Delivered industry-leading performance, growing volumes at 2x the industry average, with market share improving to 16.6%.

  • Achieved highest ever quarterly sales volume of 18.9 million tons, up 17% YoY, and normalized revenue of ₹10,277 crores, up 20% YoY.

  • Reported a PAT of ₹378 crores, a significant jump of 258% YoY, and operating EBITDA of ₹1,353 crores, up 53% YoY, with EBITDA per ton at ₹718, up 31% YoY.

  • Commissioned 2.4 million tons of Marwar Grinding Unit ahead of schedule, increasing total capacity to 109 MTPA, and unlocking an additional 15 million tons of debottlenecking capacity.

  • Implemented cost reduction initiatives: kiln fuel cost declined by 6%, power cost reduced by 15%, green power share increased by 15% to 37%, and logistics costs reduced by 1%.

Concerns

  • Q3 cost per ton increased by approximately ₹250 compared to Q2, attributed to one-off expenses like branding, repairs, higher freight, and preponed maintenance.

  • Commissioning of Warisaliganj is delayed by 3 months, now scheduled for Q1 FY27, impacting the March '26 capacity target (115 MT vs earlier 118 MT).

  • Some acquired assets (e.g., Sanghi, Penna) experienced initial operational challenges and lower utilization, though management reports significant improvement by December exit.

Key financials

  1. Sales Volume 18.9 million tons +17%YoY
  2. Revenue ₹10,277 Cr +20%YoY
  3. PAT ₹378 Cr +258%YoY
  4. Operating EBITDA ₹1,353 Cr +53%YoY
  5. EBITDA per ton ₹718 +31%YoY
  6. Diluted EPS ₹0.82
  7. Net Worth ₹69,854 Cr

What they filed

Q3 FY26: revenue up 6.2%, net profit down 18.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26
Revenue285 223 152 259 335 +18%245 +10%285 +88%275 +6%
EBITDA59 -3 3 30 36 −39%25 +933%25 +733%23 −23%
Net profit-19 -89 -196 -97 -117 −516%-75 +16%-117 +40%-115 −19%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹9,000 Cr New plan — Ballpark for growth and efficiency initiatives · Implied through strong balance sheet and zero debt position
    • Growth capex (new capacity, debottlenecking) ₹8,000 Cr
    • Efficiency capex (green power, WHRS, AFR) ₹2,000 Cr
    So capex, Siddharth, as I have also highlighted in the investor deck, around ballpark -- for the growth part, say, ballpark, INR8,000-odd crores and for the efficiencies and all, another, say, INR2,000-odd crores. So I would peg it -- but this is like a modular kind of say, capex because basis the various opportunities. My foremost focus remains and continues on capacity utilization of my existing assets. So that is like straightaway helps me to bring substantial KPIs improvement. And therefore, this capex, when I indicate to you, it also will be a factor of how the existing assets also spans out in terms of utilization of the capacity and all. But ballpark, yes, INR10,000-odd crores, you can consider. ... So in terms of capex for the 9 months, it is ballpark around INR6,000-odd crores. And I would put the run rate therefore, I've given it initially that almost INR10,000 crores is what we are expecting between growth and efficiency. And for the next 3 months also, for example, another INR3,000-odd crores. So this will be ballpark INR9,000-odd crores for this year plus/minus, say 10% run rate, we will follow passing quarter -- passing years also.
  • Debt Gross ₹0 Cr · Net ₹0 Cr · 0.0× EBITDA
    Company remains debt-free, CRISIL and CARE AAA stable and A1+ ratings, which are the highest in the country.
  • M&A ACC and Orient Cement Merger · Announced

    Beginning of a unified One Cement Platform to accelerate growth, support EBITDA expansion, strengthen operational excellence, improve logistics density and enhance capital efficiency.

    Our defining development this quarter has been the proposed amalgamation of ACC and Orient Cement with Ambuja Cements. This marks the beginning of a unified One Cement Platform that will accelerate our growth trajectory, support EBITDA expansion, strengthen operational excellence leverage, improve logistics density and enhance capital efficiency.
  • M&A Sanghi and Penna Acquisition · Integrated

    Substantial overhauling of assets, significant capacity improvement, and integration into Adani Cement platform.

    Capacity utilization for acquired assets improved to 58% (up 21% YoY), with exit December at 65%. Sanghi clinker operating at 80%, cement at 65%. Penna showing healthy improvement.

    We have also done a substantial overhauling of the assets of Sanghi, Penna, which has seen a significant capacity improvement. I must also tell you that Sanghi is now operating. The December month exit is almost at, for clinker, 80%; and for cement, 65%. Penna is also showing a very healthy improvement in the capacity utilization.

Guidance & targets

Volume

  • Industry Demand Growth Volume · FY26 · High confidence 8%
    Therefore, FY '26, I strongly believe the industry will close at almost 8% growth of demand, which resembles also like 1.1x of the GDP of almost 7.5%. So demand comes around 8%.

    — Vinod Bahety

Capacity

  • Total Capacity Capacity · now · High confidence 109 MTPA
    With this addition, our total capacity now stands at 109 million tons per annum.

    — Vinod Bahety

  • Total Capacity Capacity · March '26 exit · High confidence 115 MTPA

    Previously 118 MTPA → 115 MTPA

    So there is a delay of 3 months in Warisaliganj such that now we will be exiting March at 115 million tons as compared to earlier 118 million tons.

    — Vinod Bahety

  • Total Capacity Capacity · March '28 · High confidence 155 MTPA
    These initiatives will provide a clear and capital-efficient pathway to reach our aim of hitting 155 million tons by March of '28, which will position us strongly for sustained growth.

    — Vinod Bahety

Cost

  • Cost per ton Cost · December exit · High confidence below ₹4,000
    Therefore, exit of December already, as I said, we are below INR4,000 a ton.

    — Vinod Bahety

  • Cost per ton Cost · March '28 · High confidence ₹3,650
    Our narrative on reaching INR3,650 per ton of cost by March '28 continues.

    — Vinod Bahety

  • Power Consumption Reduction Cost · quickly · Medium confidence 10-12 units/ton
    I find there's a scope for me to reduce by almost 10 to 12 units per ton. And in terms of rupees per unit, almost INR1.5 to INR2, which is like although end objective, but INR1 immediately. So ballpark, INR100 to INR125 a ton, I see improvement possible quickly on the power.

    — Vinod Bahety

  • Power Cost Reduction Cost · quickly · Medium confidence ₹100-125/ton
    So ballpark, INR100 to INR125 a ton, I see improvement possible quickly on the power.

    — Vinod Bahety

  • Fuel Cost Reduction Cost · future · Medium confidence ₹150/ton
    On the fuel, almost like power -- the fuel is almost INR150 reduction is what, for example, we would like to peg ourselves.

    — Vinod Bahety

  • Logistics Cost Reduction Cost · future · Medium confidence ₹150/ton
    So on logistics part, for example, when I look at it, almost INR150 reduction is what we are targeting to.

    — Vinod Bahety

  • Raw Material Cost Reduction Cost · future · Medium confidence ₹100/ton
    And on the raw material, almost INR100.

    — Vinod Bahety

EBITDA

  • EBITDA per ton (acquired assets) EBITDA · future · Medium confidence ₹1,250-1,300
    And the target is to hit EBITDA, which is almost closer to INR1,250 to INR1,300 a ton and then gradually move towards INR1,500 per ton.

    — Vinod Bahety

Trade Mix

  • Trade vs Non-Trade Mix Trade Mix · gradually, January already · High confidence 70%-30%

    Previously 65%-35% → 70%-30%

    Currently, my share of trade and non-trade is almost, 65% is trade and non-trade is 35%. Down the line, it will be moving towards 70%-30%. By the way, end of December, exit of December, we are seeing this trend of 67%-33%. And January already, we are at 70%-30%.

    — Vinod Bahety

Green Power

  • Renewable Energy Capacity Green Power · FY27 · High confidence 1,122 MW
    We expect to reach 1,122 megawatts by FY '27, providing this long-term insulation in terms of the energy price volatility.

    — Vinod Bahety

Commissioning

  • Penna Commissioning Commissioning · Q3 FY26 · High confidence this quarter (Feb)
    Good. So Penna -- Amit, thank you. Penna is expected in this quarter itself. It is being targeted somewhere like third week of February, but hopefully, like mid of February, yes. So this quarter itself, the commissioning will happen.

    — Vinod Bahety

  • Maratha Commissioning Commissioning · Q1-Q2 FY27 · Medium confidence Q1-Q2 FY27
    Maratha somewhere like in Q2 kind of scenario.

    — Vinod Bahety

  • Assam Greenfield Plant Commissioning · closer to FY28 exit · Medium confidence 18-24 months
    Yes. I would say that since Assam is Assam and therefore, like it could take around, I would say, ballpark, say, 24-odd months -- 18 to 24 months is what, for example, we should be looking at.

    — Vinod Bahety

Market context

  • Company Volume Growth Volume · coming quarters · High confidence double-digit
    See, volume will be growing double digit. While my base will keep increasing, but double digit is what we are expecting.

    — Vinod Bahety

What to watch in Q4 FY26

Cost per ton (March '26 exit)

next quarter (March '26 exit)
Current ₹4,500 (Q3 average), below ₹4,000 (Dec exit)
Target below ₹4,000

Why it matters

Verifying the sustained cost reduction trend and the impact of one-off expenses fading out is crucial for profitability.

Therefore, exit of December already, as I said, we are below INR4,000 a ton. ... my confidence to circle back to you on March exit at below INR4,000 is very high.

Risks & concerns

  • Cost volatility and one-off expenses

    medium

    Q3 saw a cost hike of ~₹250/ton due to one-off branding, repairs, higher freight, and preponed maintenance, but December exit was below ₹4,000/ton.

    Management acknowledged

  • Initial lower utilization and operational issues at acquired assets (Sanghi, Penna)

    medium

    Some acquired assets faced initial challenges like equipment failures (Tandur, Jamul) and specific site issues (Sanghi's 'island plant' nature, weather impacts), but significant improvements in utilization are now visible.

    Management acknowledged

  • Competitive pricing pressure

    medium

    Aggressive competition in the Center region led to subdued pricing, though Southern markets saw price increases.

    Management acknowledged

  • Delay in Warisaliganj commissioning

    low

    Warisaliganj commissioning is delayed by 3 months, now expected in Q1 FY27, leading to a slight revision in March '26 capacity target from 118 MT to 115 MT.

    Management acknowledged

Q&A highlights

7 direct
Volume growth excluding acquired assets and focus on premiumization Direct
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 questioned the underlying organic growth rate, and management clarified that core Ambuja/ACC grew better than industry average.

Asked by Navin Sahadeo

Utilization and accounting of renewable energy sold in the market Direct
As of now, this income of power, it resides under the other operating income in the P&L, yes. So that is how it is. If I net it off in my power cost, then it will be much lower. But from an accounting perspective, right now, third-party sale is residing under the other operating income.

Clarified how the income from selling unutilized renewable energy is recognized and its impact on power costs.

Asked by Navin Sahadeo

Accounting change for plant maintenance amortization Direct
What now we want to bring it, which is more logically to all of you also that this amortization will happen over 12 months so that the quarters don't get distorted with the scheduled plant maintenances.

Explained a key accounting policy change aimed at smoothing out cost volatility from maintenance activities across quarters.

Asked by Ritesh Shah

Accounting for coal sales (grossing up vs netting off) Direct
Given the discussions which we had with our auditors, we have shown it as gross at both the ends. So that is going under the revenue from operations instead of netting it off on the power and fuel and the value was INR315 crores for the period. ... It is only the grossing up. No impact on the P&L item, right? Absolutely.

Clarified an accounting change for coal sales that impacts presentation but not the underlying P&L, addressing potential investor confusion.

Asked by Ritesh Shah

Reasons for Q3 opex increase and one-off costs Direct
No. So like a good level of, for example, almost like in terms of my branding and my repairs, for example, almost INR125 is sort of like one-off. In terms of my higher freight, because sometimes you then go with a larger lead, and it is almost like INR25 to INR35 higher per ton.

Provided specific quantification of one-off expenses and higher freight costs that contributed to the Q3 opex increase.

Asked by Rahul Gupta

EBITDA per ton targets for acquired assets Direct
And the target is to hit EBITDA, which is almost closer to INR1,250 to INR1,300 a ton and then gradually move towards INR1,500 per ton.

Gave specific profitability targets for the acquired assets, indicating the expected value creation from integration.

Asked by Jashandeep Singh Chadha

Sanghi plant performance and ramp-up challenges Direct
It's like a classic island plant. And you have seen some of the harsh seasons. So last year, for example, you have seen flooding and all and huge storms. Some of the plants were affected and Sanghi was also some equipments were damaged. ... So now, I think with 80% in December exit when I say December exit is December month, 80% of clinker capacity being used and almost 65% for cement. I think from here, things are now only improving.

Addressed specific operational challenges at Sanghi (weather, equipment damage, infrastructure) and outlined ongoing improvements, providing context for its ramp-up.

Asked by Kunal Shah

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Highlights

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.

Strategic Initiatives & Capacity Expansion

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.

Cost Optimization & Efficiency Gains

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.

Acquired Assets Integration & Performance

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.

Market Dynamics & Pricing

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.

Capital Allocation & Debt Profile

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.

ESG & Digitalization Focus

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.

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