ACC Limited (Part of Adani Portfolio) Q3 FY26 Earnings Call Summary

Summary

Ambuja Cements Limited (Consolidated with ACC, Orient, Sanghi, Penna) - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026, 17:30 IST

Event Participants

Executives 3 Deepak Balwani (Head, Investor Relations), Rohit Soni (Chief Financial Officer), Vinod Bahety (Chief Executive Officer)

Analysts 10 Amit Murarka (Axis Capital), Ashish Jain (Macquarie Capital), Jashandeep Singh Chadha (Nomura), Jyoti Gupta (Nirmal Equity), Krupal Maniar (Antique Stockbroking), Kunal Shah (DAM Capital), Navin Sahadeo (ICICI Securities), Pinakin (HSBC), Prateek Kumar (Jefferies), Rahul Gupta (Morgan Stanley), Rajesh Ravi (HDFC Securities), Ritesh Shah (Investec), Raashi (Citibank)

Financials & KPIs (Consolidated)

Geographic & Segment Commentary

• Trade vs. Non-Trade: Strategic shift towards trade channel which reached 67% exit in Dec and 70% in Jan. Focus remains on premiumization (Ambuja Kawach, ACC Gold) to drive higher realizations and market share.
• Acquired Assets (Sanghi, Penna, Orient): Utilization improved to 58% for the quarter with a Dec exit of 65%. Sanghi clinker utilization reached 80% in Dec post-overhauling, while Penna is ramping up following equipment repairs at Tandur.
• Regional Markets: Southern and Northern markets saw price hikes in Jan (₹5–₹20/bag). West (Mumbai) remains a strong premium market, while Central and Eastern India face higher competitive intensity.

Company-Specific & Strategic Commentary

• One Cement Platform: Proposed amalgamation of ACC and Orient with Ambuja to unify operations. Expected to drive EBITDA expansion and logistics density over 24–36 months.
• Capacity Expansion: Total capacity reached 109 MTPA with Marwar GU commissioning. On track for 115 MTPA by March 2026 and 155 MTPA by March 2028 via brownfield expansions at Bhatapara, Marwar, and Sanghi.
• Cost Leadership Program: Targeting cost of ₹3,800/ton by March 2027 and ₹3,650/ton by March 2028. Drivers include 1,122 MW renewable target, WHRS, and logistics optimization using 7 new owned vessels and EV trucks.
• Digitalization (CiNOC): Launched AI-enabled Cement Intelligent Network Operations Center to optimize supply chain and plant productivity.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Cost & One-offs

• Question: What drove the ₹250/ton sequential cost increase despite prior efficiency guidance? (Rahul Gupta)
• Answer: Approximately ₹150/ton was due to one-offs: branding for “Adani Cement” transition, legal costs, and preponed maintenance at Tandur and Jamul plants. December exit cost was significantly lower at <₹4,000/ton. (Vinod Bahety)

Renewable Energy

• Question: Why hasn’t the 898 MW commissioned RE capacity reflected in lower power costs yet? (Navin Sahadeo)
• Answer: Pending final consumption approvals, some power is currently being sold to the grid (recorded in Other Operating Income). Captive consumption benefits will scale as new clinker lines at Bhatapara and Maratha ramp up. (Vinod Bahety/Rohit Soni)

Capacity Revision

• Question: Why was the FY26 exit target reduced to 115 MTPA? (Rahul Gupta)
• Answer: We faced a 3-month delay at Warisaliganj (now Q1 FY27) and decided to mothball 2 million tons of unviable old capacity at Sindri and Jamul to focus on efficiency. (Vinod Bahety)

Acquisition Strategy

• Question: Will the JP assets at AEL eventually be merged into Ambuja? (Ritesh Shah)
• Answer: AEL is a separate entity; no comments can be made on their transactions. However, our 155 MTPA target for FY28 includes both organic and inorganic growth. (Vinod Bahety)

Key Takeaway

Ambuja Cements delivered a high-growth quarter with volumes rising 17% YoY to 18.9 million tons, significantly outperforming the industry. While reported costs spiked to ₹4,500/ton due to one-time branding and plant overhauling expenses, the management emphasized a “clean” exit rate below ₹4,000/ton in December. Strategically, the company is pivoting toward a 70% trade mix and high premiumization (35% of trade) to sustain realizations. With the unification into “One Cement Platform” and a clear roadmap to 155 MTPA by FY28—supported by a ₹70,000 crore net worth and zero debt—the company is positioned as a cost leader. The upcoming commissioning of clinker lines at Bhatapara and Penna in Q4 FY26 is expected to stabilize margins and drive double-digit volume growth into the next fiscal year.