Summary
Ambuja Cements Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026, 5:30 PM IST
Event Participants
Executives 3 Deepak Balwani (Head, Investor Relations), Rohit Soni (CFO), Vinod Bahety (CEO)
Analysts 10 Amit Murarka (Axis Capital), Ashish Jain (Macquarie), Jashandeep Singh Chadha (Nomura), Jyoti Gupta (Nirmal Equity), Kunal Shah (DAM Capital), Navin Sahadeo (ICICI Securities), Pinakin (HSBC), Prateek Kumar (Jefferies), Rahul Gupta (Morgan Stanley), Raashi (Citibank), Rajesh Ravi (HDFC Securities), Ritesh Shah (Investec), Siddharth Mehrotra (Kotak Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume | 18.9 million tons | +17% YoY; highest ever quarterly volume driven by market execution and acquired assets. |
| Revenue (Normalized) | ₹10,277 crores | +20% YoY; supported by ₹5 per bag improvement in realizations. |
| Operating EBITDA | ₹1,353 crores | +53% YoY (excl. Himachal drawback); driven by lower fuel and power costs. |
| EBITDA per Ton | ₹718 per ton | +31% YoY; however, declined QoQ from ₹1,060 due to one-time branding and maintenance costs. |
| PAT (Normalized) | ₹378 crores | +258% YoY; adjusted for exceptional items like tax refunds and excise drawbacks. |
| Net Worth | ₹69,854 crores | High capital adequacy; company remains debt-free with AAA ratings. |
| Capacity | 109 million tons | +2.4 million tons added via Marwar GU; target of 115 million tons by March 2026. |
| Green Power Share | 37% | +15% YoY; 898 MW commissioned out of 1,122 MW target for FY27. |
| Cost per Ton | ₹4,500 per ton | +₹250 QoQ; management noted Dec exit was <₹4,000 as one-time costs subsided. |
Geographic & Segment Commentary
- South: Performance remains modest compared to other clusters; management is accelerating blended cement adoption at Penna assets and targeting trade share gains via institutional partnerships and digital tools.
- West & North: Robust clusters with higher realizations, specifically in Mumbai; North capacity is being strengthened through the Marwar Mother Unit and a new line in Mundra using calcium sludge.
- East & Central: Central market remains under pressure due to aggressive competition; East saw a recovery in December. Capacity in the East is centered around the Bhatapara growth engine.
Company-Specific & Strategic Commentary
- One Cement Platform: The proposed amalgamation of ACC and Orient Cement into Ambuja aims to unify operations, improve logistics density, and enhance capital efficiency over a 24-36 month horizon.
- Premiumization: Premium products accounted for 35% of trade sales, growing 31% YoY; Ambuja Kawach and ACC Gold remain core blockbuster brands.
- Logistics & Infrastructure: Ordered 7 vessels for sea logistics (delivery mid-2027) and expanding the BCFC rake fleet to optimize fly ash movement and reduce lead distances.
- Asset Turnaround: Acquired assets (Sanghi, Penna) saw utilization rise to 58% in Q3 from 37% YoY; Sanghi clinker utilization reached 80% by December exit following overhauling.
- Decarbonization: First Indian cement company to adopt TNFD framework; installing Coolbrooks RDH technology for kiln electrification and pilot carbon capture projects.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Capacity | 115 million tons (FY26) | Re-estimated from 118MT due to 3-month delay in Warisaliganj commissioning. |
| Long-term Capacity | 155 million tons (FY28) | Combination of organic GUs, debottlenecking (15MT), and inorganic opportunities. |
| Cost Target | ₹3,800/ton (FY27) | Expected reduction driven by green power, WHRS, and logistics optimization. |
| Final Cost Goal | ₹3,650/ton (FY28) | Driven by high-efficiency new kilns and ₹4.5/unit power cost target. |
| Annual Capex | ~₹10,000 crores | Budgeted for growth (~₹8k Cr) and efficiency/sustainability (~₹2k Cr). |
Risks & Constraints
| Risk | Context |
|---|---|
| Cost Volatility | Q3 costs spiked to ₹4,500/ton due to one-time branding and equipment failures at Tandur (Penna) and Jamul (ACC); mitigation involves amortizing O&M over 12 months from FY27. |
| Execution Delays | Warisaliganj GU delayed by 3 months to Q1 FY27; Sanghi expansion is currently capped at 17,500 TPD pending minor debottlenecking by June/July. |
| Competitive Pricing | Central and Southern markets are prone to aggressive pricing and “rollback-prone” patterns, though January 2026 showed firmer ground. |
Q&A Highlights
Cost & Revenue Accounting
- Question: Why did opex increase QoQ despite earlier guidance that integration costs were over? (Rahul Gupta)
- Answer: Approximately ₹150/ton was due to one-time branding (Adani Cement launch), legal costs, and pre-poned maintenance; December month exit was significantly lower at <₹4,000/ton (Vinod Bahety).
- Question: Clarify the ₹315 crore coal sale accounting. (Ashish Jain)
- Answer: At the ACC level, coal sales are now grossed up in revenue and power/fuel costs due to MSA requirements; however, this has zero impact on consolidated EBITDA or NSP (Rohit Soni).
Capacity & Expansion
- Question: What is the breakdown of the 155 million ton target? (Rahul Gupta)
- Answer: FY27 exit target is ~135MT, moving to 155MT in FY28; the pipeline includes 15MT of debottlenecking at <$50/ton and new clinker lines in Bhatapara, Marwar, and Sanghi (Vinod Bahety).
- Question: When will the Assam greenfield capacity be ready? (Rajesh Ravi)
- Answer: Land is secured and work has started; targeting a 24-month construction timeline for the 4MT line, reaching completion near FY28 exit (Vinod Bahety).
Asset Performance
- Question: Why is Sanghi utilization still low after two years? (Kunal Shah)
- Answer: The asset faced structural challenges (transmission line upgrades, dredging, and storm damage); recent revamps pushed December clinker utilization to 80% (Vinod Bahety).
Key Takeaway
Ambuja Cements delivered a robust Q3 FY26 with 17% volume growth (18.9 million tons) and a 53% increase in normalized EBITDA, despite a temporary spike in operating costs to ₹4,500 per ton. Management successfully integrated acquired assets, raising their utilization from 37% to 58%, with flagship unit Sanghi reaching 80% clinker utilization by year-end. Strategically, the company is pivoting toward a 70:30 trade/non-trade mix and aggressive premiumization (35% of trade sales) to maintain realization leads over peers. With a debt-free balance sheet and ₹70,000 crore net worth, Ambuja remains on track for 115 million tons by FY26 and 155 million tons by FY28, supported by an annual ₹10,000 crore capex program. The outlook remains positive with January 2026 witnessing price hikes of ₹5-20 per bag across key markets.
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