Post Adani takeover, ACC-Ambuja Cement EBITDA rises to Rs 1,350/tonne

Ambuja Cement has a cement capacity of 31 million tonne per annum with 6 integrated cement manufacturing plants and 8 cement grinding units across the country.

After Adani Group taking over ACC and Ambuja Cement, the EBITDA has risen to Rs 1,350 per tonne from Rs 350 and the group is looking to scale it up to Rs 1,400 by 2024, sources said. In a move to broaden its business verticals, Adani Group last year acquired Ambuja Cement Ltd and ACC Ltd. Ambuja Cement has a cement capacity of 31 million tonne per annum with 6 integrated cement manufacturing plants and 8 cement grinding units across the country. ACC has a cement capacity of 34.45 million tonne with 17 cement manufacturing units, 85 ready-mix concrete plants.

The acquisition placed Adani in direct competition with Ultratech Cement, India's largest cement manufacturer. And Adani Group is now planning to double the annual cement making capacity by 2027. Since taking over in September 2022, the EBITDA per tonne of cement has increased from Rs 350 to Rs 1,350, company sources said adding this will be scaled up to Rs 1,400 per tonne by 2024.

The current EBITDA margin is about 20 per cent, which is being targeted to be raised to about 25 per cent. Sources said the group is looking to achieve a sale of 120 million tonne by March 2028. The target is to achieve a topline of Rs 70,000 crore and EBITDA of Rs 17,500 crore. At those levels, the EBITDA per tonne will be close to Rs 1,450 which translates to a margin of about 25 per cent.

The conglomerate is looking to add 70 million tonne capacity over the next five years using a very efficient modern energy efficient grinding plant. The recent Sanghi Cement acquisition added 6.1 million tonne of cement capacity, 6.6 million tonne of clinker capacity and 1.1 billion tonne of limestone reserves - enough to cater to additional production of 24 million tonne per annum of cement.

Sources said the group has a capex outlook of about Rs 46,000 crore over the next five years for both organic and inorganic growth in the cement sector. It will set up greenfield and brownfield projects as well as carry out debottlenecking in existing units to unlock and increase capacity without incurring heavy capex.

It has already placed orders for capacity expansion projects for 8 million tonne of clinker and 19 million tonne of cement.