Ambuja Cement Ltd Quarterly Results Q4 FY 25 stock analysis

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Sector Outlook: Positive

Robust volume-led growth; Cost control and expansion support long-term growth

Ambuja Cements Ltd. reported an operating revenue of Rs. 98,025 million (up 16.5% QoQ / up 11.6% YoY),driven by a strong focus on its micro-market management strategy, expansion of ground network and high sales volume during the quarter. The company reported EBITDA at Rs. 17,814 million (up 123.1% QoQ / up 12.0% YoY). Its EBITDA margin stood at 18.2% compared to 18.1% for the same quarter in the previous year and 9.5% in the last quarter. The company’s EBITDA/ton fell marginally to Rs. 1,001 during the quarter, compared to Rs. 1,026 in Q4FY24 and Rs. 1038 in Q3FY25. Raw material costs stood at Rs. 18,268 million (up 1.2% QoQ / up 4.1% YoY). This increase was mainly due to the clinker purchased during the quarter. The company is making efforts to reduce raw material costs and increase operational efficiency by making long-term arrangements for fly ash and improving plant infrastructure for material handling. Freight costs were higher during the quarter and stood at Rs. 23,361 million (up 14.3% QoQ / up 10.2% YoY). Power and Fuel costs increased to Rs. 22,988 million (up 11.5% QoQ / up 15.3% YoY) as there was more production of clinker volume than the consumption, which will be beneficial in the coming quarters. The company is also focusing on increasing the share of green power and AFR consumption, and maximizing the share of captive coal. Other costs stood at Rs. 12,039 million (down 9.0% QoQ / up 18.9% YoY). The annual increase was due to the company’s higher expenditure on branding and consultancy services. The company’s profitability reduced during the quarter and stood at Rs. 12,822 million (down 51.1% QoQ / down 15.7% YoY). The company achieved the highest-ever cement volumes, which increased by 12.7% YoY, with total sales reaching 18.7 MT. During the quarter, the company completed the acquisition of Orient Cement along with a 2.4 MTPA brownfield expansion of GU in Farakka (WB) and debottlenecking of 0.5 MTPA across various plants. Ambuja crossed 100 MTPA capacity and is on track to achieve its target of 140 MTPA by FY28.

Key Concall Highlights

Ambuja Cements has crossed 100 million tons of cement capacity with the completion of its acquistion of Orient Cement, the commissioning of the grinding unit at Farakka, and the debottlenecking of capacity at various plants, thereby becoming the 9th largest cement company globally.
The company’s subsidiary ACC has become India’s first large-scale cement company, with science-based net zero targets validated by SBTi.
Additional grinding units will be commissioned in Q1 FY26, primarily Sankrail and Sindri.
99 MW of wind power at Khavda was commissioned in Q4FY25. By June 2026, the entire 1,000 MW will be operational
The company’s focus for FY26 is on the commissioning of fairly advanced-stage projects such as Sankrail, Sindri, Salai Banwa, Dahej, Marwar, Kalamboli, Krishnapatnam, Bhatinda, Jodhpur, and Warisaliganj. Ambuja is on track to commission its 4 million tons of clinker unit at Bhatapara in Chhattisgarh, for which 87% progress has been made, along with the associated grinding units in Sankrail in Bengal, which has reached 88% progress, and Sindri in Jharkhand by Q1FY26.
The grinding units at Salai Banwa in Uttar Pradesh are expected to be commissioned in Q2FY26, and the expansion of the Kalamboli unit in Maharashtra is scheduled to be commissioned in Q3FY26.
Brownfield expansions include Bhatinda in Punjab, Marwar in Rajasthan, Dahej in Gujarat, and Jodhpur in Rajasthan. Jodhpur, an integrated unit of Penna currently under construction, is expected to be commissioned by Q3FY26.
The 4 million-ton clinker unit at Maratha in Maharashtra and the grinding unit at Warisaliganj in Bihar are also expected to be commissioned by the end of FY26.
The company has identified nine additional grinding unit projects for which land acquisitions and statutory approvals are underway.
The company has a WHRS capacity of almost 218 MW. Looking ahead, it aims to achieve 30%, including all new projects with a capacity of 140 million, of which 30% will be WHRS.
Ambuja has invested in 1,000 MW of renewable energy, which is expected to be commissioned by FY26. Currently, 300 MW is already operational.
The company has secured nearly 367 million tons of limestone, bringing its total to over 9,000 million tons. This 367 million tons comes from three new mines, two located in MP and one in Assam.
The company has embraced Industry 4.0, Predictive Analytics, Automation, Artificial Intelligence, ML, and several digital technologies to enhance efficiency, streamline operations, and improve customer experience.
Ambuja has the highest credit rating in the industry.
The company saw a 5.3% rise in the percentage of premium products within overall trade sales, bringing the total to 29.1%, and aims for 35% by FY26.
The company is concentrating on promoting premium cement, currently holding a market share of 29%-30%, and plans to expand its ground network as well as its branding and promotional activities.
Growth CapEx is projected to be approximately Rs. 6,000 crores, which covers the expense of increasing cement capacity by 18 million tons

Valuation and Outlook

Ambuja Cements is entering a strong growth phase under the Adani Group, backed by a clear strategy focused on volume-driven growth and operational cost leadership. The recent milestone of crossing 100 MTPA capacity, achieved in a record time of just 30 months, is symbolic and shows the company’s fast execution. With India’s growing demand for infrastructure and housing, especially in tier 2 and 3 cities, Ambuja is in a great position to benefit. Its focus on reducing costs by improving logistics, in-house energy sources, and the use of technology gives Ambuja an edge in the industry, especially during times of price and supply changes. Ambuja’s profit margins are expected to improve as it works towards its target of reducing costs to Rs. 3,650 per ton by FY28. The upcoming capacity additions, increasing green power usage, and enhanced digitization through AI-based systems offer cost advantages. Furthermore, a debt-free balance sheet with over Rs. 10,000 crores in cash gives it the flexibility to grow through both organic expansion and opportunistic acquisitions. With a focus on investing in premium products, brand building and digital tools to improve service and efficiency, Ambuja is well-positioned to enhance profitability. We believe it will remain a compelling long-term investment in India’s cement industry