Ambuja Cements reported a tough second quarter for FY27, with net profit falling 89% year-on-year to Rs 193 crore. Revenue remained flat at Rs 9,197 crore as cement volumes saw a marginal 1% decline. Profitability was hit by a 28% drop in EBITDA, driven by rising fuel costs and inflationary pressures on logistics. Despite the weak quarterly show, the company continues its aggressive capacity expansion plan and maintains a positive outlook on long-term infrastructure and housing demand.
Ambuja Cements Q2FY27 Profit Plunges 89% on Rising Costs
Q2FY27 Net Profit: Rs 193 crore; Q2FY27 EBITDA: Rs 1,271 crore.
Reader Takeaway: Rising fuel and logistics costs pressured margins, though management remains optimistic on H2 volume recovery and capacity expansion.
What just happened
Ambuja Cements reported a significant decline in profitability for the quarter ended September 2026. The company’s net profit slumped 89% to Rs 193 crore, missing market estimates. Revenue remained flat at Rs 9,197 crore, reflecting a soft demand environment and a 1% decline in sales volumes to 16.5 million tonnes (MnT). EBITDA margins compressed by 540 basis points to 13.8%.
Why this matters
The sharp earnings miss highlights how external pressures are squeezing the bottom line. Total cost per tonne rose 8% to Rs 4,746, with power and fuel costs jumping 13% due to higher petcoke and coal prices. Freight expenses also rose 5%, adding to the margin drag. For investors, this confirms that operating leverage remains constrained by high input costs despite modest price hikes.
The backstory
Cement demand in Q2 was impacted by an extended monsoon season, which delayed construction activity. While realization per tonne rose 1% year-on-year, it could not offset the broader inflationary trend in production costs. Axis Securities has subsequently lowered its earnings estimates for FY27 and FY28 to account for these margin headwinds.
Expansion and Strategy
Despite short-term volatility, Ambuja is pushing forward with its scale-up strategy. Current capacity stands at 113.5 MTPA, with a roadmap to reach 119 MTPA by end-FY27 and 149 MTPA by FY29. The ongoing consolidation of ACC and Orient Cement is intended to drive synergies once NCLT approval is finalized.
What to track next
Watch for the recovery in H2FY27 volumes, as management expects growth to outpace the industry. Monitor the success of recent price hikes (Rs 10 per bag as of October 2026) in stabilizing margins against volatile fuel prices.