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Informist, Tuesday, Jul. 28, 2026

 

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--Ambuja Cements: See impact of monsoon in near-term cement demand
--CONTEXT:Ambuja Cements mgmt's comments in post-earnings call with analysts
--Ambuja Cements: Saw 8% improvement in trade volumes in July
--Ambuja Cements: Retain 8% volume growth guidance for FY27
--Ambuja Cements: Expect to sell 200 mln units green power in Q2
--Ambuja Cements:See better utilisation,higher margin from Sanghi coming qtrs
--Ambuja Cements: See INR 100 per tn rise in costs due to W Asia war
--Ambuja Cements: See trade share in total volume to be over 75%
--Ambuja Cements: Expect to add 8 mln-10 mln tn capacity every year
--Ambuja Cements: Expect cost at INR 4,000 per tn or below by FY28 end
--Ambuja Cements: Expect to reduce cost by INR 250 per tn in FY28
--Ambuja Cements: Aim to sustain margins, reduce cost going forward

 

By Ashutosh Pati and Arya Biju

 

MUMBAI – Ambuja Cements Ltd. Tuesday retained its guidance for volume growth of 8% in 2026-27 (Apr-Mar) despite a dip in the June quarter. Trade volumes improved by 8% in July and the company's management remains confident of maintaining this growth throughout the year as it focusses more on trade than non-trade volumes.

 

"I think the whole focus is on the trade volume...Now, from here onwards, on behalf of our brand equity, Ambuja, ACC, with the parent brand, Adani Cement, we are riding quite well in terms of the volume growth," a top official told analysts in the post-earnings conference call.

 

The company expects the share of trade volume to account for over 75% of overall volumes in the coming quarters. Ambuja Cements' total sales volume for the June quarter declined 7% to 17.1 million tonnes from 18.4 million tonnes in the year-ago quarter. The share of trade volume rose 4 percentage points to 78%. The company's trade volume rose 2% on year in North India during the June quarter while non-trade volume fell sharply. "As far as West is concerned, it is well-balanced between trade and non-trade, since the key markets of Mumbai and Gujarat are stronger on higher margins of non-trade volumes," the management said.

 

The company has delivered on its plans of cost optimisation from FY27 as it lowered costs by INR 206 per tonne sequentially in the June quarter. "This (INR) 206, by the way, is after absorbing the (INR) Rs 110, which we believe also has hit us from the West Asia escalation...if I have to gross it up, actually my saving is Rs 316 actually, on the cost side," the top official said. Ambuja Cements expects to incur INR 100 per tonne cost increase sequentially for the September quarter due to the West Asia war.

 

The company has a target to reduce costs by INR 250 per tonne to INR 4,250 per tonne by the end of FY27. It has now guided to reduce this by another INR 250 per tonne in FY28 and sees costs at INR 4,000 per tonne or lower by the end of FY28.

 

Ambuja Cements aims to sustain its margins while reducing costs from here on. The company's operatings earnings before interest, tax, depreciation, and amortisation for the quarter fell around 19% on year to INR 15.89 billion. Its operating EBITDA margin shrunk to 16.7% from 19.1% in the year ago quarter. The company's operating EBITDA per tonne fell to INR 931 for the June quarter from INR 1,069 a year ago.

 

 

For the capacities acquired from Penna Cement Industries Ltd., capacity utilisation remains a key area. They plan to improve this by investing more in the channel network and increasing the share of trade sales from these, as per the management. The company plans to further improve capacity utilisation for the plants it acquired from Sanghi Industries Ltd. It has already invested around INR 6 billion for expansions in these plants. "Sanghi is now doing well and will see every prospective quarter of better utilisation and improved margins coming from Sanghi," the management said. Capacities acquired from Orient Cement Ltd. are "well in terms of its capacity as well as margin" and utilisation can be improved here through minimal investments, the management added.

 

Ambuja Cements shut operations at some of its plants during the June quarter. Asked if it plans to "permanently mothball" these facilities, the management said these are temporary suspensions, and they are evaluating how these plants can be optimised. They did not give the outlook for capacity additions for FY28 but said eight to 10 million tonnes of expansions are preferred every year. The company plans to sell around 200 million units of green power in the September quarter. Its green power capacity was 973 megawatts as of Jun. 30. Ambuja Cements sold 450 million units in the June quarter.

 

Cement demand is expected to remain lower at 5% for FY27, with the September quarter demand to be affected due to monsoon. Ambuja Cements reported a consolidated net profit of INR 5.77 billion for the June quarter, down nearly 34% on year, but above estimates of INR 4.56 billion. Its revenue for the quarter was down 7.5% to INR 94.74 billion, and also missed projections of INR 103.31 billion. 

 

The company declared its June quarter results during market hours Tuesday. Shares of Ambuja Cements closed 1.2% lower at INR 426 on the National Stock Exchange.  End

 

Edited by Deepshikha Bhardwaj

 

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