Ambuja Cements, alongside ACC and Orient Cement, reported its Q4 FY ’26 results, highlighting a year of resilience despite industry headwinds. The company achieved its highest-ever annual sales volume of 73.7 million tonnes, a 16% increase year-on-year. Management acknowledged operational challenges and announced a strategic operational reset, focusing on disciplined capital allocation, optimizing asset locations, and reducing logistics costs to drive long-term margin expansion and target a 2027 capacity of 119 million tonnes.
Annual Performance Highlights
During FY ’26, the company successfully navigated a year marked by industry consolidation and global geopolitical shifts. Key performance metrics included a normalized EBITDA of INR 6,539 crore, representing a 31% growth, and a PAT of INR 2,647 crore, up 17%. The focus on premiumization remained strong, with premium cement products accounting for 35% of trade sales throughout the year.
Strategic Operational Reset
Management has initiated a comprehensive reset to address operational gaps, particularly regarding the integration of newly acquired assets. Karan Adani, Director of Ambuja Cements, emphasized that the current focus is on organic growth and improving execution. The company is re-evaluating its capital expenditure, prioritizing projects that reduce logistics costs by establishing grinding units closer to key consumption markets rather than relying on long-distance transport from integrated plants.
Future Outlook and Cost Management
While acknowledging that Q4 FY ’26 costs were impacted by fuel price volatility, West Asian conflicts, and packing bag constraints—resulting in a peak cost of approximately INR 4,500 per tonne—the company anticipates a progressive reduction. Management has guided for a cumulative cost reduction of INR 500 per tonne over the next two years. By the end of FY ’27, the company expects to reach a total capacity of 119 million tonnes.
Capacity and Expansion Strategy
The company maintains a strong commitment to its long-term growth targets, albeit with revised timelines. Current expansion efforts, including the Mundra clinker line and new grinding unit additions, are designed to maximize return on capital. The management confirmed that the company remains debt-free and is prioritizing the stabilization of existing operations to ensure future volume growth ahead of the broader industry, which is projected to grow at 5% to 5.5%.
Source: BSE
