Ambuja Cements reported a sharp fall in operating earnings for the September quarter as higher fuel, transport, and packaging costs ate into profits, even as the company increased premium cement sales and expanded production capacity.

The Adani Group company posted consolidated revenue of Rs 9,197 crore for Q2 FY27, up marginally from Rs 9,175 crore in the same quarter last year. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) fell 27.9 per cent to Rs 1,271 crore. The EBITDA margin dropped to 13.8 per cent from 19.2 per cent.

Consolidated profit after tax stood at Rs 236 crore, against Rs 2,336 crore a year earlier. The comparison, however, is affected by a tax provision reversal of Rs 1,697 crore included in last year’s figure.

Cement sales volume reached 16.5 million tonnes during the quarter, slightly below the 16.6 million tonnes recorded a year ago. EBITDA per tonne fell to Rs 770 from Rs 1,061, showing the pressure on earnings from each tonne sold.

The company attributed the weaker performance to higher petcoke and coal prices, limited coal availability, rising diesel costs and more expensive packaging. Geopolitical conflicts and monsoon-related disruption also affected business conditions.

Ambuja’s sales mix showed improvement during the quarter. Trade volumes, which cover cement sold through dealers and distributors, increased 8.6 per cent year-on-year.

Trade sales accounted for 74 per cent of total sales, up six percentage points from the previous year. Premium products made up 37 per cent of trade sales, compared with 35 per cent in Q2 FY26.

The shift towards premium cement is important because these products can command higher prices than ordinary cement. However, the figures also show that the improved sales mix has yet to offset the rise in production and transport costs.

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

The company is targeting a total cost of Rs 4,250 per tonne by FY27. Its total cost in Q2 stood at Rs 4,410 per tonne. Ambuja said the figure would have been Rs 4,182 per tonne without the impact of geopolitical conflicts.

Ambuja commissioned 4.6 million tonnes per annum (MTPA) of capacity during the quarter.

The additions include a 1.2 MTPA unit at Dahej, a 2.4 MTPA unit at Salai Banwa and a 1.0 MTPA unit at Kalamboli.

Another 3.2 MTPA at Bathinda and Jodhpur Penna is being stabilised and ramped up. This includes 1.2 MTPA at Bathinda and 2 MTPA at Jodhpur Penna.

A further 2.4 MTPA at Warisaliganj is expected to be commissioned in the second half of FY27.

The new capacity comes as cement demand in India continues to receive support from road building, housing, urban development and industrial construction. Yet demand can vary with the monsoon, government spending and building activity.

Bahety expects volumes to grow faster than the industry in H2 FY27, supported by trade sales and planned institutional sales.

Ambuja’s operational figures show the effect of rising fuel costs. Kiln fuel cost increased to Rs 1.87 per 1,000 kilocalories in Q2 FY27 from Rs 1.60 a year earlier.

The company has increased its use of renewable energy. Green power accounted for 61 per cent of its power use during the quarter, up from 41 per cent in Q2 FY26.

Net power cost fell to Rs 4.8 per kilowatt-hour from Rs 6 a year earlier.

The average distance travelled by cement from plants to distribution points, known as primary lead, declined to 254 km from 265 km. The reduction helped partly offset higher diesel costs.

Ambuja shareholders approved the proposed amalgamation of ACC Limited and Orient Cement Limited with Ambuja Cements at meetings held on 29 and 28 September 2026, respectively.

The proposal is part of the group’s One Cement Platform plan, which aims to bring the cement businesses under a single corporate structure.

The schemes must still receive regulatory, statutory and National Company Law Tribunal (NCLT) approvals. Completion is expected in FY27.

The company said the proposed merger is expected to be earnings per share (EPS) accretive. It could also simplify the corporate structure and support closer coordination across manufacturing and distribution.

For the six months ended September 2026, Ambuja’s cement sales volume stood at 33.6 million tonnes, against 35 million tonnes in H1 FY26.

Revenue fell to Rs 18,697 crore from Rs 19,464 crore. Operating EBITDA declined to Rs 2,860 crore from Rs 3,722 crore, while the margin fell to 15.3 per cent from 19.1 per cent.

The company reported a debt-free balance sheet, net worth of Rs 72,238 crore and cash and cash equivalents of Rs 1,070 crore. It also holds AAA/A1+ credit ratings from CRISIL, CARE, India Ratings and ICRA.

Ambuja is working with Leilac Limited on a low-carbon cement project at its 6.6 MTPA Sanghipuram plant. A pre-feasibility study is due by December 2026.

The company also reported GreenPro certification for Ambuja’s and ACC’s blended cement portfolios, along with GRIHA certification for products including Buildcem and Buildcem Pro.

Its next earnings report will show whether new capacity, higher premium sales and lower energy costs can offset the pressure from fuel prices and transport expenses.

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