Ambuja Cements Q2 Net Profit Plunges 90% As Margins Come Under Pressure

New Delhi: Ambuja Cements Ltd reported a 90 per cent year-on-year plunge in consolidated net profit to Rs 236 crore for the September quarter, as higher fuel and logistics costs and seasonal weakness squeezed operating margins at the Adani Group company.

The year-earlier profit of Rs 2,336 crore included a Rs 1,697 crore reversal of an income-tax provision, tempering the significance of the reported decline.

Revenue from operations rose 0.2 per cent to Rs 9,197 crore in the quarter ended September 30, while operating earnings before interest, tax, depreciation and amortisation (EBITDA) fell 27.9 per cent to Rs 1,271 crore, the company said in its earnings release.

Cement sales volume declined 0.6 per cent year-on-year to 16.5 million tonnes. EBITDA per tonne fell to Rs 770 from Rs 1,061 a year earlier, while the EBITDA margin contracted to 13.8 per cent from 19.2 per cent.

Ambuja attributed the pressure to higher petcoke and coal prices, constrained coal availability, and increased diesel and packaging costs, alongside geopolitical uncertainty and monsoon-related headwinds.

Despite the pressure on earnings, the company strengthened its sales mix, with trade volumes rising 8.6 per cent year-on-year and trade sales accounting for 74 per cent of total volumes, up six percentage points. Premium products increased to 37 per cent of trade sales from 35 per cent a year earlier.

“Our Q2 and H1 FY’27 performance underscores Ambuja’s focus on quality growth despite seasonal and external headwinds,” Vinod Bahety, whole-time director and chief executive officer, said. “Strengthening trade and premium product mix improved revenue quality, while disciplined execution and cost management supported profitability.”

The company reduced its primary lead distance to 254 km from 265 km a year earlier, partly offsetting higher diesel costs. Its share of green power rose to 61 per cent from 41 per cent, while net power cost declined to Rs 4.8 per kilowatt-hour from Rs 6 a year earlier.

Total cost stood at Rs 4,410 per tonne during the quarter, compared with Rs 4,182 excluding the impact of geopolitical conflicts, the company said. Ambuja reiterated its target of reducing costs to Rs 4,250 per tonne by the end of FY27.

The company commissioned 4.6 million tonnes per annum (MTPA) of capacity during the quarter at Dahej, Salai Banwa and Kalamboli. Another 3.2 MTPA at Bathinda and Jodhpur Penna is being stabilised and ramped up, while 2.4 MTPA at Warisaliganj is expected to be commissioned in the second half of FY27.

Ambuja expects volumes to grow faster than the industry in the second half, supported by stronger trade sales and calibrated institutional volumes. It also expects renewable power, new capacity and additional incentives to support performance.

The company said the industry had recently raised cement prices by Rs 10-15 per bag and expected further improvement over the next couple of months. The extent to which pricing gains offset elevated input costs will be key to a recovery in margins.

Separately, shareholders have approved the proposed amalgamation of ACC Ltd and Orient Cement Ltd with Ambuja, advancing the group’s plan to consolidate its cement businesses under a single platform. The schemes are subject to regulatory, statutory and National Company Law Tribunal approvals, with completion expected in FY27.

Ambuja reported a debt-free balance sheet, net worth of Rs 72,238 crore and cash and cash equivalents of Rs 1,070 crore at the end of September.

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