Ambuja Cements reported its Q2 FY27 results, highlighting a resilient performance despite cost headwinds. The company also detailed an aggressive expansion plan aiming to add approximately 30 million tons of cement and 10.3 million tons of clinker capacity. Key strategic priorities include structural cost improvements, disciplined capital allocation, and advancing the ‘One Cement’ platform through proposed mergers.
Ambuja Cements Q2 FY27 Performance and Future Outlook
Ambuja Cements Limited announced its financial results for the second quarter of FY27, showcasing a resilient performance marked by a 8.6% year-on-year growth in trade volume and a 6% increase in trade share, reaching 74%. The company’s focus on premium products and blended cement has yielded positive results, with premium products now constituting 37% of overall trade sales and blended cement share improving to 82%.
Aggressive Capacity Expansion
The company is advancing its growth journey with 14 expansion projects set to add approximately 30 million tons of cement capacity and 10.3 million tons of clinker capacity. These expansions are strategically located across the West, East, and North clusters, with significant additions planned in Gujarat, Maharashtra, Assam, Jharkhand, and Uttar Pradesh. The total projected capex for this expansion program is estimated at INR14,500 crore, with an ongoing capex guidance of INR6,500 to INR7,000 crore for the current financial year and approximately INR7,000 to INR7,500 crore for each of the subsequent two years. The company emphasized that this capex program is designed to be self-sustainable, supported by robust internal cash flows.
Strategic Priorities and Financial Highlights
Ambuja Cements’ strategy remains focused on creating sustainable value through structural cost improvements, disciplined capital allocation, and calibrated expansion. The company is also progressing towards its ‘One Cement’ platform goal with the proposed merger of ACC and Orient Cement, which is expected to simplify the corporate structure, unlock synergies, and be earnings per share accretive. For the consolidated Q2 FY27, key highlights include a cement sales volume of 16.5 million metric tons, revenue from operations of INR9,197 crore, and EBITDA of INR1,271 crore, reflecting an EBITDA margin of approximately 14%.
Operational Efficiency and Cost Management
The company is actively pursuing operational efficiencies, including manufacturing excellence, energy efficiency, logistics optimization, and digitalization. Efforts to improve the fuel mix, with a higher share of domestic coal, and manage logistics costs are ongoing. The fuel cost stood at INR1.87 per 1000 kilo calorie in the second quarter. Ambuja Cements aims to achieve a cost target of INR4,250 per metric ton for FY27, with an expectation of further cost reduction through various initiatives.
Market Position and Future Growth
Ambuja Cements highlighted its strong brand equity and market penetration, particularly in profitable regions like the West, East, and North. The company is committed to a value-focused approach to market share growth, emphasizing blended and green cement. The ready-mix concrete business also showed strong growth, achieving a quarterly volume of 1.07 million cubic meters, up 19% year-on-year.
Source: BSE
