Ambuja Cements Targets 155 Million Tonnes Capacity and 13% Cost Reduction by March 2028

Ambuja Cements has announced ambitious plans to significantly expand its operations by targeting a production capacity of 155 million tonnes by March 2028, an increase of 15 million tonnes from its earlier projection. This expansion will be achieved through debottlenecking initiatives costing $48 per metric tonne. Concurrently, the company aims to reduce its cost per tonne of cement by more than 13%, bringing it down from ₹4,200 to ₹3,650 by FY28. This reduction will be implemented in phases, targeting ₹4,000 by March 2026, followed by further reductions in subsequent years, primarily driven by lower fuel costs and optimized product mix. The company also reported robust quarterly results, with revenue rising 21% year-on-year to ₹9,174 crore and consolidated profit surging nearly five times to ₹2,302 crore, partly due to a significant tax provision reversal. The EBITDA margin improved to 19.2% from 14.7%, with EBITDA per tonne increasing by nearly a third.

Impact This news is highly significant for investors as it signals strong growth and efficiency plans for a major player in the Indian cement industry. The increased capacity targets and cost reduction initiatives are expected to enhance profitability and market share, potentially boosting the company's stock performance and influencing competitor strategies. The positive earnings report further bolsters investor confidence. Rating: 8/10

Terms: Debottlenecking: The process of identifying and removing constraints in a manufacturing process or production line to increase throughput and efficiency without major capital expenditure. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation): A measure of a company's operating performance that excludes interest, taxes, depreciation, and amortisation expenses. It is often used to gauge profitability.