Ambuja Cements expects cement demand to grow 8-9% in October-March FY25

Ambuja Cements has completed three major acquisitions in the past year

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26 Aug, 2025 12:21

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Adani group-owned cement major Ambuja Cements Ltd's management said it sees cement sales volumes increasing by 8-9 percent for FY25, taking overall year-on-year volume growth for the industry in the range of 4-5 percent.

This was after the first half of the year has been a near-washout for the industry in terms of demand and pricing, due to the near-three-month-long General Election, and the monsoons.

The company has amalgamated two high-profile acquisitions - Sanghi Industries and Penna Cement - into its fold, although the required capital expenditure on the units of the two companies are in various stages of completion. For Penna, the more recent acquisition, Ambuja's management said it has paid an enterprise value of around Rs 7,800 crore of the total planned spend of around Rs 10,000 crore, with the rest of the spending at Penna's facilities will be completed by FY26.

In a post-earnings investor call outlining its capital expenditure and capacity expansion plans, Ambuja Cements said it has earmarked expansion projects in Penna's Jodhpur and Krishnapatnam works, adding 2 million tonnes per annum (MTPA) each in cement grinding capacity. Additionally, the company will also add 3 MTPA in clinker capacity at the Jodhpur facility.

Last week, Adani Cement, Ambuja's parent, announced yet another acquisition in the form of Orient Cement from the CK Birla Group, in order to expand its market position in southern India. Ambuja's management did not comment on the acquisition pipeline, saying that it is focused on integrating Orient and Penna into the company's operations, adding, however, that it will continue on a growth path powered by both organic and inorganic expansions.

With continued weakness in cement prices, all cement makers have focused on increasing institutional sales in order to eke out better realisations. Ambuja Cements, in its investor presentation, noted that non-trade, or institutional sales, had increased to 3.6 million tonnes on a consolidated basis for the July-September quarter, against 2.9 million tonnes in the same quarter last year.

During the earnings call, the management said that besides non-trade sales, the firm will be aiming to increase the sale of premium products, in order to seek better realisations and margins at a higher price point.

While Ambuja has continued to reduce the per tonne operating cost for cement, the company's management said that more work needs to be done in order to reach its goal of reducing per tonne costs by around Rs 500.

For the July-September quarter, its operating cost was Rs 4,497 per tonne, down by Rs 184 on a year-on-year basis. To achieve more cost savings, the management said that initiatives are being taken to utilise its captive coal mines, as well as use more petcoke, energy efficiency measures, and use more of its own rakes and ships for dispatches.