Can Ambuja Cements Maintain Its Cost Advantage After Elara’s Upgraded Target Price?
About Ambuja Cements
Ambuja Cements Ltd, a flagship company of the Adani Group, reported a strong set of Q2FY26 numbers supported by robust operational efficiency and volume growth. The company’s ongoing capacity expansion and lower operating cost structure position it strongly for sustainable growth in the infrastructure-driven cement cycle.
Elara Capital highlighted that Ambuja achieved a 3% YoY reduction in operating costs and plans to lower the cost per tonne to ₹3,650 by FY28. The brokerage noted EBITDA/tonne rising 34% YoY to ₹1,048, reflecting successful integration and improved pricing discipline.
Financial Highlights (Q2 FY26)
| Metric | Q2 FY26 | YoY |
|---|---|---|
| Revenue | ₹9,960 Cr | +13% |
| EBITDA | ₹1,770 Cr | +58% |
| EBITDA Margin | 17.8% | vs 12.3% |
| PAT | ₹1,030 Cr | +62% |
Revenue ₹9,960 Cr grew 13% YoY on healthy dispatch volumes and improved realizations. EBITDA ₹1,770 Cr jumped 58% with margin improvement to 17.8%, reflecting cost savings and improved pricing power. PAT ₹1,030 Cr surged 62% YoY, showing robust operational leverage.
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Peer Comparison
| Company | Revenue Growth | EBITDA Margin |
|---|---|---|
| Ambuja Cements | +13% | 17.8% |
| UltraTech Cement | +11% | 19% |
| Shree Cement | +9% | 18% |
SWOT Analysis
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Valuation & Investment View
- Short-term: Positive on strong volume visibility and cost synergies.
- Medium-term: Margin improvement through efficiency gains.
- Long-term: Structural growth from capacity expansion and demand revival.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, notes that Ambuja’s focus on cost optimization and expansion ensures sustained competitive advantage. Explore more such sectoral insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Ambuja Cements
- What are the key drivers behind Ambuja’s 58% YoY EBITDA growth in Q2FY26?
- How is Ambuja achieving a reduction in cost per tonne?
- Will Ambuja’s capacity expansion to 155 MT enhance profitability?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
