Ambuja Cements Q4 results: Net profit falls 9% to Rs 956 crore, sluggish prices hurt margins

Ambuja Cements Q4 results: Net profit falls 9% to Rs 956 crore, firm declares Rs 2 dividend

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26 Aug, 2025 12:21

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Adani Group-owned Ambuja Cements on April 29 reported consolidated net profit of Rs 956 crore for the quarter ended March 31, 2025, a decline of 9 percent from Rs 1,051 crore in the year-ago period, as sluggish prices continued to have an impact on profitability for the cement industry during the reported quarter.

This was despite the company reporting a near-13 percent growth in consolidated sales volumes over the same period to 18.7 million tonne, including cement and clinker. Ambuja's consolidated operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) per tonne declined to Rs 1,001 for the quarter, against Rs 1,026 in the same quarter last year.

The operating EBITDA margin for the quarter eroded by around 20 basis points to 18.9 percent. However, the consolidated operating EBITDA for Ambuja Cements increased to Rs 1,868 crore, against Rs 1,699 crore a year ago.

Ambuja Cements' chief executive officer Vinod Bahety told investors in a post-earnings call that despite overall weakness in cement prices, some price growth has been visible in recent months, in the range of Rs 7 to Rs 8 per bag. He said that with infrastructure spending by governments increasing, more price increases are expected in the cement industry.

The firm's revenue from operations rose 11.5 percent to Rs 9,802 crore in Q4FY25 as against Rs 8,785 crore in Q4FY24, driven by the increase in sales volumes on a consolidated basis, while the company's other income also grew year-on-year during the quarter. Ambuja's consolidated results include that of its subsidiaries ACC, Sanghi Industries, unlisted Penna Cement, and other acquired assets. The company completed its acquisition of Orient Cement earlier in April.

Ambuja CEO Bahety added that at Penna, the clinker production capacity is now operating at 75 percent to 80 percent of its capacity, while the grinding unit is in the process of being ramped up. As for the ramp-up at the Sanghi Industries plant in Gujarat, Bahety conceded that the company is a "few months behind" on its targets there, due to the plant's location (on an island), and issues regarding maintenance, power and dredging at the site.

However, he added that the issues at the Sanghi plant are being addressed, and that it will be a "jewel" for the company due to the significant planned supply of clinker from the site.

Having recently crossed a cement capacity of 100 million tonne per annum (MTPA), Ambuja Cements' management told investors that the company expects to finish FY26 with a capacity of 118 MTPA. Key projects expected to be finished in the financial year include a clinker expansion at its Bhatapara plant in Chhattisgarh, as well as grinding unit expansions in Sindri, Jharkhand, Warsaliganj in Bihar, and at Sankrail in West Bengal.

In all, Ambuja is expected to spend around Rs 10,000 crore by way of capital expenditure in FY26, Out of this, the management added that around Rs 6,000 crore is classified as growth capital expenditure, while the rest is dedicated towards efficiency measures, such as increased marine transportation, specialised fly ash transportation rakes, and energy efficiency initiatives, in order to continue in the company's mission to reduce costs by Rs 500 per tonne.

Bahety added that it expects cement demand to grow by around 8 percent in FY26, driven by infrastructure spending. As for increasing market share, the company noted that it is exploring opportunities in the north-east. The company services markets such as Assam through its plants in West Bengal - Farakka and Sankrail - and it has also bagged limestone mine licences in the state, crucial to setting up cement grinding units.

While inorganic growth has been crucial to Ambuja's expansion strategy, the management told investors that the company is planning a largely organic-led growth, while mergers and acquisitions will be carried out opportunistically.

The company announced dividend of Rs 2 per share. June 13 has been fixed as the record date for the payment of the dividend.

On April 29, Ambuja Cements shares on BSE closed 2 percent lower at Rs 534.10 apiece.