Will Ambuja Cements Maintain Its Margin Strength Amid Ongoing Expansion Plans?
About Ambuja Cements
Ambuja Cements Ltd, part of the Adani Group, is among India’s top cement manufacturers with a capacity exceeding 70 million tonnes. The company focuses on sustainable cement production through alternative fuels, waste heat recovery systems, and cost optimization. Its strategic integration with ACC continues to create operating synergies and efficiency gains.
HSBC reiterated its “Buy” rating with a ₹700 target, noting that Q2 beat was primarily tax-driven but underlined by genuine cost reduction. Elara Securities raised its target to ₹647 while maintaining “Accumulate,” citing strong EBITDA/tonne improvement and aggressive capacity expansion plans for FY28. The management now targets 155 MTPA by FY28, up from 140 MTPA earlier.
Financial Highlights (Q2 FY26)
| Metric | Q2 FY26 | YoY Change |
|---|---|---|
| Revenue | ₹10,030 Cr | +15% |
| EBITDA | ₹1,770 Cr | +58% |
| EBITDA/tonne | ₹1,048 | +34% |
| PAT | ₹1,246 Cr | +43% |
Revenue ₹10,030 Cr increased on strong volume growth. EBITDA ₹1,770 Cr jumped 58% YoY due to lower fuel costs and operational efficiency. EBITDA/tonne ₹1,048 marked a multi-quarter high, signaling cost normalization across logistics and raw materials.
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Peer Comparison
| Company | EBITDA/tonne | YoY Change |
|---|---|---|
| Ambuja Cements | ₹1,048 | +34% |
| UltraTech Cement | ₹1,180 | +28% |
| Shree Cement | ₹1,060 | +31% |
Ambuja’s operating efficiency continues to improve, narrowing the margin gap with top peers. The integration of logistics, fuel optimization, and capacity ramp-up are expected to drive further gains.
SWOT Analysis
Strengths
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Weaknesses
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Ambuja’s cost leadership and expansion plan mitigate pricing risks while ensuring higher capacity utilization.
Opportunities
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Threats
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Valuation & Investment View
- Short-term: Margins to remain stable with further cost normalization.
- Medium-term: Earnings growth driven by capacity ramp-up and synergies with ACC.
- Long-term: Structural demand recovery supports sustained value creation.
Investor Takeaway
Gulshan Khera, CFP®, SEBI Registered Investment Adviser, notes that Ambuja’s efficient cost management, scale expansion, and energy optimization position it favorably within the sector. The company remains a steady compounder backed by balance sheet strength. Read more expert-driven insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Ambuja Cements
- Will Ambuja sustain EBITDA/tonne above ₹1,000 in FY26?
- How does Ambuja’s capacity expansion compare to peers?
- What are the risks from rising energy costs?
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.
