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Ambuja Cements Q1 FY27 Results Bring Hope Amid Cost Pressures

The Adani Group Company Remains Debt-Free, with Major Expansion Projects Underway.

Ambuja Cements, part of the Adani Group, reported a mixed start to the 2026 to 27 financial year, posting stronger operating margins and lower production costs despite a fall in sales volumes and profit during the quarter ended 30 June 2026.

The company recorded cement sales of 17.1 million tonnes in the first quarter, down from 18.4 million tonnes in the same period last year and 19.9 million tonnes in the previous quarter. Revenue from operations stood at Rs 9,500 crore, compared with Rs 10,289 crore a year earlier. Net profit fell to Rs 660 crore from Rs 1,041 crore in the corresponding quarter of FY26, while diluted earnings per share declined to Rs 2.32 from Rs 3.53.

Even with lower sales and earnings, the company reported stronger operating performance on a quarter-by-quarter basis. Operating EBITDA reached Rs 1,589 crore and EBITDA per metric tonne rose to Rs 931 from Rs 735 in the previous quarter, an increase of 27 per cent. EBITDA margin improved to 16.7 per cent from 13.4 per cent in the January to March 2026 quarter.

Ambuja Cements said it reduced operating costs by Rs 206 per metric tonne during the quarter through measures such as better energy efficiency, lower clinker usage and tighter cost control. These gains came even as the cement industry faced higher fuel and freight expenses linked to geopolitical tensions in West Asia.

“We have started FY’27 with strong momentum, driven by our focus on value-led growth, premiumisation and disciplined execution. Higher trade sales and an increased share of premium products strengthened our market mix, resulting in improved profitability and quality of earnings.

Despite temporary cost headwinds arising from the West Asia geopolitical tensions, we delivered a sequential cost reduction of Rs. 206 PMT through operational excellence, improved energy efficiency, a lower clinker factor and disciplined cost management. This resulted in a 331 bps QoQ expansion in EBITDA margin to 16.7%.

Looking ahead, we are confident we can maintain our momentum and further improve our cost structure. We are well on track to increase our capacity to 119 MTPA by the end of FY’27, with the commissioning of Dahej (1.2 MTPA), Salai Banwa (2.4 MTPA), Bathinda (1.2 MTPA), Jodhpur (2 MTPA), Kalamboli (1 MTPA) and Warisaliganj (2.4 MTPA). We are firmly on course to deliver cost reduction of approximately Rs 250 PMT to achieve the targeted cost of Rs 4,250 PMT by the end of FY’27.

At the same time, we continue to strengthen our leadership in sustainable construction through innovation and our partnership with LEILAC, accelerating our low-carbon transition and building capabilities that will support the next phase of growth.”

The company increased the share of cement sold through the trade channel to 78 per cent, four percentage points higher than a year earlier. Premium products accounted for 34 per cent of trade sales, up from 33 per cent in the same quarter last year. Lower clinker use also helped improve efficiency, with the clinker factor falling to 63.7 per cent from 65.8 per cent a year ago.

India remains the world’s second largest cement producer after China, according to government data. Demand for cement is closely linked to spending on roads, railways, housing, industrial projects and urban development. Public investment in infrastructure has remained one of the main drivers of the sector in recent years, although seasonal rains often reduce construction activity during the first half of the financial year.

Industry conditions became more difficult during the quarter because imported fuels such as petcoke and thermal coal became more expensive following conflict in West Asia. Higher shipping and logistics costs added further pressure on manufacturers. Cement companies generally maintain fuel inventories for 60 to 90 days, meaning the effect of higher fuel prices may continue into the second quarter.

To reduce dependence on conventional power, Ambuja Cements expanded its renewable energy capacity by 75 MW during the quarter, taking the total to 973 MW. Renewable sources supplied 34 per cent of the company’s electricity requirement, compared with 28 per cent a year earlier. Primary lead distance improved to 249 kilometres from 269 kilometres, helping reduce transport costs.

The company continued work on one of the largest expansion programmes in the Indian cement industry. Installed cement capacity stood at 109 million tonnes per annum on 30 June 2026. Ambuja expects this to rise to 119 million tonnes per annum before the end of FY27 through projects at Dahej in Gujarat, Salai Banwa in Madhya Pradesh, Bathinda in Punjab, Jodhpur in Rajasthan, Kalamboli in Maharashtra and Warisaliganj in Bihar. Trial production has already started at Dahej, Salai Banwa, Bathinda and Jodhpur, while Kalamboli and Warisaliganj are scheduled to begin trials during the second quarter. The Maratha clinker line, with a capacity of 4 million tonnes per annum, is expected to be commissioned in 2027.

The balance sheet remained strong. Ambuja Cements said it continues to operate without debt and reported a net worth of Rs 71,954 crore along with cash and cash equivalents of Rs 844 crore. The company retained AAA and A1+ credit ratings from CRISIL and CARE, the highest ratings awarded by the agencies.

The company also announced several sustainability initiatives. It entered into a partnership with UK-based Leilac Limited to develop one of the world’s largest commercial-scale carbon capture pathways for cement production. Carbon capture technology is considered an important tool for reducing emissions from cement manufacturing, a sector responsible for about 7 to 8 per cent of global carbon dioxide emissions due to the energy-intensive production process and the chemical reactions involved in making clinker.

Ambuja Cements and ACC received GreenPro certification from the Confederation of Indian Industry for their blended cement products. The company also secured GRIHA certification across its blended cement portfolio, including the Buildcem and Buildcem Pro range. These certifications are used in India’s green building sector to measure environmental performance and help developers meet sustainability standards.

On the technology front, the company expanded cybersecurity systems, introduced more automation across manufacturing operations and increased the use of artificial intelligence for business analysis. It said more than 40 business performance indicators are now available through AI-enabled tools.

Brand promotion remained another area of activity during the quarter. Ambuja Kawach and ACC Gold received outdoor and digital marketing campaigns across major markets. Ambuja Cement and ACC together won five Silver Awards at The Mommys Awards 2026 for brand communication. Technical teams also carried out 36,794 site engagements, organised 237 skill development workshops and 323 technical events, reaching more than 14,000 participants and generating over 301,000 business leads.

Looking ahead, the company expects India’s cement demand to grow by about 5 per cent during FY27. While the monsoon season, higher fuel costs and international uncertainty may continue to affect short-term demand, long-term prospects remain tied to government infrastructure spending, urban expansion and housing construction. Ambuja Cements said it plans to support future growth through capacity expansion, operational efficiency, premium products and a wider ready mix concrete business.