Orient Cement Limited (part of Adani Cement/Ambuja Cements) Q3 FY26 Earnings Call Summary

Summary

Orient Cement 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), Krupal Maniar (Antique Stockbroking), Kunal Shah (DAM Capital), Navin Sahadeo (ICICI Securities), Pinakin (HSBC), Prateek Kumar (Jefferies), Rajesh Ravi (HDFC Securities)

Financials & KPIs

Geographic & Segment Commentary

• Southern Market: Leading price increases in the range of ₹15 to ₹20 per bag for non-trade. Focus shifting toward blended cement production at Penna assets to improve margins.
• Northern/Western Markets: Price increases of ₹5-10 per bag observed in non-trade. These regions remain more stable and less prone to competitive aggression compared to Central/East.
• Trade Segment: Accounts for 65% of sales (exit Dec at 67%, Jan target 70%). Strategy focused on premium products like Ambuja Kawach and ACC Gold to drive realization delta.

Company-Specific & Strategic Commentary

• One Cement Platform: Amalgamation of ACC and Orient Cement into Ambuja is progressing; aimed at improving logistics density and capital efficiency over 24-36 months.
• Capacity Expansion: Aiming for 155 MTPA by March 2028. Unlocking 15 million tons through debottlenecking at <$50/ton capex; Warisaliganj GU delayed by 3 months to Q1 FY27.
• Energy Transition: Green power share increased to 37%; 900 MW renewable capacity currently operational. Goal to reach 1,122 MW by FY27 to reduce power cost to ₹4.5/unit.
• Logistics Optimization: Ordered 7 coastal vessels for mid-2027 delivery and introducing EV rakes. Strategy includes placing blenders and BCTs near consumption centers to reduce lead distance.
• Digitalization: Launched CiNOC (AI-enabled Network Operations Center) to optimize IT/OT systems and improve supply chain analytics.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Cost & One-offs

• Question: What drove the sequential opex increase despite previous integration guidance? (Rahul Gupta)
• Answer: ~₹150/ton was one-time, involving Adani Cement branding, overhauling Sanghi/Penna assets, and maintenance at Tandur/Jamul. December exit is significantly lower at <₹4,000/ton (Vinod Bahety).

Capacity & Expansion

• Question: Can you provide a breakdown of the 155 MTPA road map? (Amit Murarka)
• Answer: Growth engines are Bhatapara (East), Sanghi/Mundra (West), and Marwar (North). We are also adding a 4 MTPA line in Assam (Vinod Bahety).

Accounting Changes

• Question: Why is ACC amortizing maintenance over 12 months now? (Ritesh Shah)
• Answer: To prevent quarterly distortion of results from scheduled shutdowns; it provides a more logical view of operational performance (Vinod Bahety).

Renewable Energy

• Question: Why is green power being sold to the market instead of used? (Navin Sahadeo)
• Answer: Pending final consumption approvals and new capacity ramp-ups; currently booked as “Other Operating Income” but will net against power costs once fully captive (Vinod Bahety).

Key Takeaway

Orient Cement, under the unified Adani Cement platform, delivered a robust Q3 FY26 with 17% volume growth and normalized PAT growth of 258% YoY. While quarterly costs were elevated at ₹4,500/ton due to strategic branding and intensive maintenance of acquired assets, the December exit cost of <₹4,000/ton signals a return to cost leadership. The company is aggressively expanding its footprint toward a 155 MTPA target by FY28, supported by brownfield expansion at mother units (Bhatapara, Marwar, Sanghi) and a significant shift toward 70% trade mix and 37% green power. Management remains bullish on industry demand (8% growth) and maintains a net-debt-free balance sheet with ₹69,854 crores in net worth, providing ample headwind for both organic and opportunistic inorganic growth.