Ambuja Cements Q2 FY27: Revenue at INR 9,197 Crore; Merger Updates

Revenue stood at INR 9,197 crore with an EBITDA of INR 1,271 crore for the quarter.

Reader Takeaway: Robust operational efficiencies and debt-free status are offset by execution risks linked to massive capacity expansion plans.

What just happened

Ambuja Cements released its Q2 FY27 financial results, reporting a resilient performance despite market headwinds. The company clocked a sales volume of 16.5 million metric tons. Operational highlights include an 8.6% year-on-year growth in trade volumes and an increased share of premium products at 37% of trade sales. The ready-mix concrete segment also saw a 19% growth year-on-year.

Why this matters

The company’s strategic shift towards high-margin premium products and blended cement (now 82% of the mix) is helping offset inflationary pressures in fuel and logistics. Furthermore, management is aggressively pursuing a debt-free expansion roadmap of 14 projects to hit 149 million tons capacity by FY29.

Corporate Developments: Merger

The NCLT approval process for the merger of ACC and Orient Cement into Ambuja Cements is ongoing. Management expects to finalize the integration within the current financial year. This move is designed to simplify the corporate structure and generate significant operating synergies, ultimately expected to be earnings-per-share accretive.

Costs and Efficiencies

Ambuja Cements has successfully reduced its net power cost from INR 6 per unit last year to INR 4.8 per unit this quarter. Increased reliance on domestic coal has helped stabilize fuel expenses, keeping the company on track to meet its internal cost target of INR 4,250 per metric ton.

Risks to watch

Investors should closely monitor the execution risk associated with the 30 million-ton capacity expansion. Additionally, competitive industry-wide capacity additions and potential regional demand weakness due to monsoon fluctuations remain key variables for future quarters.

Context Metrics

• Net Worth: INR 72,238 crore
• EBITDA per Ton: INR 770
• EBITDA Margin: ~14%