Ambuja Cements Revenue Jumps 20%, Eyes Major Merger

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AuthorRiya Kapoor|Published at:
Ambuja Cements Revenue Jumps 20%, Eyes Major Merger
Overview

Ambuja Cements reported a strong Q3 FY26 with consolidated revenue soaring 20% year-on-year to INR 10,277 crores, driven by a record 18.9 million tons in sales volume. Normalized Profit After Tax (PAT) surged an impressive 258%, while Operating EBITDA grew 53%. The company also highlighted its strategic move towards amalgamating ACC and Orient Cement, aiming to forge a unified 'One Cement Platform' for accelerated growth and efficiency, alongside ambitious capacity expansion and cost leadership targets.

Ambuja Cements Unleashes Strong Q3 FY26 Performance Amidst Strategic Amalgamation

Ambuja Cements Limited has posted robust financial results for the third quarter and nine months ended December 31, 2025 (Q3 FY26), showcasing significant year-on-year (YoY) growth across key metrics. The company's performance was bolstered by record sales volumes, improved realisations, and strategic advancements, most notably the proposed amalgamation of its subsidiaries ACC and Orient Cement.

📉 The Financial Deep Dive

The Numbers

  • Sales Volume: The company achieved its highest-ever quarterly sales volume at 18.9 million tons, marking a substantial 17% increase YoY. This growth also saw market share improve to 16.6%.
  • Revenue: Consolidated revenue reached INR 10,277 crores, a 20% jump YoY. This uplift was attributed to volume expansion and an improvement in realisations, estimated at INR 5 per bag compared to the prior year.
  • Profit After Tax (PAT): On a normalized basis, excluding exceptional items such as tax refunds and one-off adjustments, PAT witnessed a dramatic 258% surge YoY, reaching INR 378 crores. The reported PAT figures showed a steeper decline due to these exceptional items.
  • Operating EBITDA: Operating EBITDA grew by 53% YoY to INR 1,353 crores. On a per-ton basis, EBITDA stood at INR 718, an increase of 31% YoY. Management clarified that a Himachal excise drawback was a one-off item impacting reported EBITDA.
  • Earnings Per Share (EPS): Diluted EPS for the quarter was reported at INR 0.82.

The Quality

The company demonstrated improved profitability metrics, with a 31% YoY increase in EBITDA per ton, indicating enhanced operational efficiency and pricing power. Financially, Ambuja Cements remains robust, with a net worth of approximately INR 70,000 crores and a confirmation of its debt-free status. Credit ratings are strong at 'AAA stable' and 'A1+'. Capital expenditure for the first nine months of the fiscal year stood at around INR 6,000 crores, with the full-year projection estimated between INR 9,000-10,000 crores for growth and efficiency initiatives.

The Grill

Management expressed strong optimism regarding the industry outlook, projecting an 8% growth for FY26, which they expect to be in sync with GDP expansion. Strategic initiatives are well underway, including a target capacity of 155 million tons per annum (MTPA) by March 2028, with the commissioning of the 2.4 MT Marwar Grinding Unit. The company also aims to reduce its cost per ton to INR 3,650 by March 2028 through green power, alternate fuels, and logistics optimization.

The proposed amalgamation of ACC and Orient Cement is a cornerstone of their strategy, aiming to create a unified 'One Cement Platform'. This integration is designed to accelerate growth, enhance EBITDA, and improve capital efficiency. Acquired assets are being targeted for 80% utilization with an expected EBITDA of INR 1,250-1,300 per ton, progressing towards INR 1,500 per ton. A shift towards the trade channel, targeting a 70%-30% split, is also planned to boost realisations and premiumization.

🚩 Risks & Outlook

While the outlook is largely positive, a slight delay in the commissioning of the Warisaliganj facility has been noted. However, the company is actively managing its renewable energy footprint, targeting 1,122 MW by FY27, and has launched digital initiatives like CiNOC, an AI-enabled central control system.

Investors will be watching the successful integration of ACC and Orient Cement closely over the next few quarters. The company's focus remains on leveraging its integrated platform, driving operational efficiencies, expanding capacity, and maintaining cost leadership to ensure sustained growth and shareholder value.

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