Summary
Sanghi Industries Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026 4:00 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 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), Rajesh Ravi (HDFC Securities), Rahul Gupta (Morgan Stanley), Ritesh Shah (Investec)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume (Consol) | 18.9 million tons | +17% YoY; Highest ever quarterly volume driven by 2x industry growth. |
| Revenue (Normalized) | ₹10,277 crores | +20% YoY; Supported by higher volumes and ₹5/bag improvement in realizations. |
| Operating EBITDA | ₹1,353 crores | +53% YoY (normalized); Adjusted for ₹826 Cr one-off excise drawback in Himachal. |
| EBITDA per Ton | ₹718/ton | +31% YoY; Impacted by higher Q3 opex but exit December month was below ₹4,000/ton. |
| Profit After Tax (PAT) | ₹378 crores | +258% YoY (normalized); Reported numbers include exceptional tax refunds/incentives. |
| Total Capacity | 109 MTPA | Includes Marwar GU commissioning; Target of 115 MTPA by March 2026. |
| Cost per Ton (Opex) | ₹4,500/ton | +₹250 QoQ; Driven by brand transition, asset overhauling, and seasonal maintenance. |
| Net Worth | ₹69,854 crores | High capital base; Company remains debt-free with AAA rating. |
Geographic & Segment Commentary
- South Segment: Witnessed non-trade price increases of ₹15-₹20 per bag; management is focusing on ramping up Penna assets and shifting toward blended cement to improve utilization from current 52-55% levels.
- West Segment: Strong performance in markets like Mumbai; Sanghi unit achieved 80% clinker utilization in December, supported by dredging activities and power line strengthening.
- Trade vs. Non-Trade: Trade sales accounted for 65-67% of mix during the quarter with a target to reach 70-75%; premium products now represent 35% of trade volumes, up 31% YoY.
Company-Specific & Strategic Commentary
- Unified Platform & Consolidation: The proposed amalgamation of ACC, Orient, and Sanghi into the “One Cement Platform” aims to leverage logistics density and achieve cost synergies over 24-36 months.
- Green Energy Transition: Commissioned 898 MW of renewable capacity toward a 1,122 MW goal; currently selling surplus power to the market while awaiting captive consumption approvals to reduce unit costs.
- Logistics & Digitalization: Investing in 7 new vessels for sea logistics and 15 million tons of debottlenecking capacity; launched CiNOC (AI-enabled operations center) to optimize transit and supply chain efficiency.
- Asset Overhauling: Significant one-time O&M expenditure incurred at Sanghi and Penna units to bring them up to Adani standards; future O&M will be amortized over 12 months to reduce quarterly volatility.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Capacity | 155 MTPA by March 2028 | Phased targets: 115 MTPA (FY26), 135 MTPA (FY27) via organic/inorganic routes. |
| Production Cost | ₹3,650/ton by FY28 | Intermediate target of ₹3,800 by FY27; to be achieved via green power and logistics. |
| Annual Capex | ₹10,000 crores | Budgeted annually for growth (₹8k Cr) and efficiency/maintenance (₹2k Cr). |
| Demand Growth | ~8% for FY26 | Management expects double-digit volume growth for the group, exceeding industry average. |
Risks & Constraints
| Risk | Context |
|---|---|
| Cost Volatility | Q3 costs spiked to ₹4,500/ton due to “one-off” maintenance and branding; management must demonstrate consistent sub-₹4,000 performance. |
| Capacity Underutilization | Acquired assets (Sanghi/Penna) are currently operating at 55-58% utilization; requires significant market share gain in competitive regions to hit 80% target. |
| Execution Delay | Warisaliganj commissioning delayed by 3 months to Q1 FY27; potential for further regulatory or site-specific hurdles in greenfield projects like Assam. |
Q&A Highlights
Cost & One-offs
- Question: What specifically drove the sequential increase in opex despite previous guidance? (Rahul Gupta)
- Answer: Approximately ₹150/ton was one-time, involving branding, legal costs, and preponed maintenance; December month exit cost was already below ₹4,000/ton (Vinod Bahety).
Asset Performance
- Question: Why is Sanghi utilization still sub-50% after acquisition? (Kunal Shah)
- Answer: Topography issues and harsh seasons required dredging and power line revamping; clinker utilization reached 80% in December month (Vinod Bahety).
Accounting Changes
- Question: Why amortize maintenance over 12 months from next year? (Ritesh Shah)
- Answer: To prevent quarterly distortion of results from scheduled shutdowns; makes the P&L more comparable across periods (Vinod Bahety).
Renewable Energy
- Question: Why are you selling green power instead of consuming it? (Navin Sahadeo)
- Answer: Awaiting specific regulatory consumption approvals; income is currently in “Other Operating Income” but will shift to “Power & Fuel” savings once consumed captively (Vinod Bahety).
Key Takeaway
Sanghi Industries, as part of the Adani “One Cement” platform, reported strong consolidated volume growth of 17% YoY, significantly outpacing the industry. While quarterly costs rose to ₹4,500/ton due to extensive overhauling of acquired assets and branding initiatives, management emphasized a December exit cost below ₹4,000/ton and a clear roadmap to ₹3,650/ton by FY28. Strategic focus remains on premiumization (35% of trade sales) and aggressive capacity expansion, with a target of 155 MTPA by March 2028. Total annual capex is pegged at ₹10,000 crores, funded by a zero-debt balance sheet and ₹70,000 crores in net worth. The company is successfully integrating legacy assets like Sanghi and Penna, moving toward a 70% trade mix and higher green energy utilization. Management remains bullish on an 8% industry demand growth and expects double-digit growth for the group in Q4 FY26.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: