Ambuja Cements' consolidated net profit dropped by 84% year-on-year in the second quarter of fiscal year 2027, reflecting challenging operating conditions. Despite a small rise in revenue, the company faced increased costs and lower profitability margins.
- Consolidated net profit fell 84% in Q2 FY27.
- Revenue from operations slightly increased to ₹9,166 crore.
- Operating profit (EBITDA) declined 28% to ₹1,240 crore.
- EBITDA margin contracted from 18.81% to 13.53%.
- Shareholders approved the amalgamation of ACC and Orient Cement.
What caused the decline in Ambuja Cements' Q2 profits?
The company faced several challenges during the quarter ended September 30, 2026. These included geopolitical tensions, disruptions from monsoon rains, seasonal plant shutdowns, and rising energy costs. Domestic coal availability was also constrained, adding to operational difficulties.
Commercial diesel prices increased by 25-30% over six months, impacting costs by approximately ₹228 per tonne. These factors combined to reduce operating profit and margins despite steady revenue.
How did Ambuja Cements perform in terms of sales and production?
Ambuja reported cement sales volume of 16.5 million tonnes in Q2 FY27. Trade volumes grew 8.6% year-on-year, with the trade share rising to 74%. Premium products made up 37% of trade sales, increasing by 2 percentage points.
The company commissioned 4.6 million tonnes per annum (MTPA) of new capacity, including 1.2 MTPA at Dahej, 2.4 MTPA at Salai Banwa, and 1 MTPA at Kalamboli. Additionally, 3.2 MTPA of capacity at Bathinda and Jodhpur Penna stabilized and is expected to ramp up further in the second half of FY27.
What strategic steps is Ambuja Cements taking to improve performance?
Ambuja is focusing on manufacturing excellence, energy efficiency, logistics optimization, and digitalization. The company maintains a debt-free balance sheet with a net worth of ₹72,238 crore and cash reserves of ₹1,070 crore.
It plans to commission another 2.4 MTPA capacity at Warisaliganj in the second half of FY27. The use of renewable power and infrastructure improvements are expected to support better performance moving forward.
What is the significance of the ACC and Orient Cement amalgamation?
Shareholders approved the proposed merger of ACC and Orient Cement with Ambuja Cements, advancing the One Cement Platform initiative. This consolidation aims to create a stronger, unified company. The merger requires regulatory approvals and is expected to complete within FY27.
How does Ambuja Cements view future market conditions?
The company expects volume growth to outpace the industry in the second half of FY27, driven by increased trade volumes and selective institutional sales. Following a recent price increase of ₹10-15 per tonne, further price improvements are anticipated in the coming months.
Ambuja aims to achieve a cost target of ₹4,250 per tonne by the end of FY27 through disciplined cost management and operational efficiencies.
Frequently Asked Questions
Q: What was Ambuja Cements' revenue in Q2 FY27?
A: The revenue from operations was ₹9,166 crore, slightly higher than ₹9,130 crore in the previous year.
Q: How much did Ambuja's operating profit decline?
A: Operating profit (EBITDA) declined by 28% to ₹1,240 crore from ₹1,717 crore in Q2 FY26.
Q: What are the main reasons for higher costs?
A: Increased energy costs, higher diesel prices, monsoon disruptions, and geopolitical tensions contributed to higher expenses.
Q: What is the One Cement Platform?
A: It is a strategic merger of Ambuja Cements with ACC and Orient Cement to create a unified cement company.
Q: Is Ambuja Cements carrying any debt?
A: No, the company maintains a debt-free balance sheet.
