The Power of Growth: Ambuja’s ₹2,620 Crore Profit & Future Plans
Newzdaddy Business Updates
Synopsis of the Article
- Ambuja Cements’ Profit After Tax (PAT) more than doubled year-on-year (YoY) in Q3 FY’25.
- Net worth stands at ₹62,535 crore, with zero debt and ₹8,755 crore in cash reserves.
- Highest-ever cement sales volume in a quarter at 16.5 million tonnes (Mn T), a 17% YoY growth.
- EBITDA per metric tonne (PMT) at ₹1,038; EBITDA margin at 18.4%.
- 200 MW solar power plant commissioned at Khavda, expected to reduce power costs in upcoming quarters.
- Added 631 Mn MT limestone reserves, increasing total reserves to 8.3 billion MT.
- Net Zero commitment: Partnered with Finland-based Coolbrook for zero-carbon heating technology.
- Expansion plans: Cement production capacity to hit 104 MTPA by Q4 FY’25, 118 MTPA by FY’26, and 140 MTPA by FY’28.
- EPS at ₹8.59 per share, up ₹4.72 YoY.
- The acquisition of Orient Cement is expected to be completed by Q4 FY’25; mergers of Penna and Sanghi Cement are in progress.
- Operational improvements led to cost reductions, with logistics and kiln fuel costs decreasing.
- Green power consumption increased to 21.5%, with a roadmap to reach 60% by FY’28.
- Strengthened supply chain, optimized freight costs, and enhanced efficiency in fly ash transportation.
- The company remains debt-free with a strong AAA credit rating.
- Investments in digitalization, automation, and ESG initiatives for long-term sustainability.
- Expected growth in cement demand due to government infrastructure and housing projects.
- Recognized with prestigious awards for excellence in ESG, logistics, and workplace health initiatives.
Ambuja Cements, a major participant in the cement market in India and a member of the Adani Group, has released exceptional financial results for the third quarter (Q3) of the 2024–2025 fiscal year. The company’s position as a cost and market leader was strengthened by a notable increase in profitability, market expansion, and operational efficiency.
Ambuja Cements’ Profit After Tax (PAT) increased by more than 100% year over year in Q3 FY’25, demonstrating the company’s robust development trajectory. With a current net worth of ₹62,535 crore, the company is significantly debt-free and has ₹8,755 crore in cash reserves.
At 16.5 million tonnes (MnT), the company’s cement sales volume in a quarter reached its greatest level ever, representing a 17% year-over-year increase. This milestone has been facilitated by strategic acquisitions as well as increased demand for housing and infrastructure.
Ambuja Cements keeps enhancing its cost leadership through targeted operational enhancements:
Increased usage of imported petcoke and better coal procurement resulted in a 10% reduction in kiln fuel costs.
Strategic freight negotiations and effective supply chain management resulted in a 5% reduction in logistics expenses.
With investments in waste heat recovery systems (WHRS) and solar, green power consumption increased to 21.5%.
To minimize freight costs, supply from the Krishnapatnam Grinding Unit to Cochin and Mangalore via maritime routes has started.
Ambuja Cements has set lofty goals for a growth capacity of 104 million tonnes per annum (MTPA) by Q4 of FY’25, 118 MTPA by FY’26, and 140 MTPA by FY’28 through acquisitions and organic expansion.
While mergers with Penna Cement and Sanghi Cement are in progress, the acquisition of Orient Cement is anticipated to be completed by Q4 of FY’25.
Ambuja Cements is still committed to sustainability and reaching net-zero emissions. The business recently As part of its 1000 MW renewable energy plan, a 200 MW solar power plant was put into service in Khavda to lower energy costs. reduced reliance on fossil fuels by partnering with Coolbrook, a company based in Finland, to deploy RotoDynamic heating technology, which emits zero carbon. expanded the usage of mixed cement, which is less harmful to the environment.
The company’s long-term environmental goals will be supported by 60% of its energy coming from renewable sources by FY’28. Ambuja Cements is proactively incorporating digital technologies to improve customer interaction and operations. Among the noteworthy developments the biggest SAP Suite on HANA update in Asia, increasing operational effectiveness. installation of an electronic proof of delivery system, which cuts down on paperwork and invoicing time.introduced “Rewards Connect,” a digital contractor loyalty program. In terms of branding, the business strengthened client relationships by launching festive ad campaigns for Durga Puja and Diwali and partnering with Gujarat Giants in the Pro Kabaddi League.
Improved housing demand and increased government spending on infrastructure are anticipated to help the cement industry. The modest growth observed in the first half of the year is expected to be reversed in FY’25 when industry-wide cement demand is expected to increase by 4-5%.
Ambuja Cements is well-positioned to surpass market growth in the upcoming quarters thanks to its aggressive expansion strategy, emphasis on cost-effectiveness, and dedication to sustainability.
In Q3 of FY’25, Ambuja Cements received several distinguished awards Golden Peacock Award for Excellence in ESG, 2024.2024 CII SCALE Award for Logistics Excellence. its dedication to worker health, it won gold at the 2024 Arogya World Healthy Workplace Awards. The business has a solid basis for long-term success thanks to its emphasis on innovation, sustainability, and operational efficiency.
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