Ambuja Cements Ltd Quarterly Results Q3 FY 25 stock analysis

Home » Financial News Hotbox » Results » Ambuja Cements Ltd – Q3FY25 Result Update

Sector Outlook: Positive

Strong PAT growth despite cost pressures

Ambuja Cements reported strong revenue growth in Q3FY25, driven by higher sales, but faced lower profitability due to increased raw material costs, lower prices, and additional expenses related to newly acquired assets and plant shutdowns. EBITDA dropped significantly compared to last year but improved slightly from the previous quarter. Freight and fuel costs also increased, though the company is working on reducing energy costs through waste heat recovery and solar power. Cement sales rose 17% YoY to 16.5 MT. The company commissioned a 200 MW solar power project in Gujarat, moving towards its goal of using 60% renewable energy by FY28. Capacity expansion continues, with total capacity expected to reach 104 MT by the end of FY25. Additionally, 631 MT of new limestone reserves were secured, and the Orient Cement acquisition is nearing completion. Ambuja also expanded its ready-mix concrete network, reaching 100 plants.

Key Concall Highlights

The company expects to complete key projects, including the Kalamboli unit (Maharashtra), Dahej grinding unit (Gujarat), Jodhpur Penna grinding facility (Q3FY26), and Salai Banwa facility (Q1FY26).
Cement demand is projected to grow by 4-5% in FY25, with H2FY25 expected to perform better than H1FY25.
The company commissioned a 200 MW solar power plant in Gujarat (Khavda) and aims to meet 60% of power needs with green energy by FY28.
Clinkerization will use 83% green power, and cost-saving initiatives could reduce expenses by 8-10%.
Blended cement made up 82% of total production, while premium products in trade sales grew to 26% (up 400 basis points).
The company has received 11 GPWIS rakes for efficient clinker transport and ordered 26 BCFC rakes for fly ash transport, with five already delivered and four more expected by March 2025.
The company remains debt-free with a net worth of Rs. 63,000 crores and holds a AAA rating.
Partnered with Finland’s Coolbrook to adopt zero-carbon heating, reducing fossil fuel use in manufacturing.
Used 4.8 million tonnes of waste-derived resources like fly ash, slag, and plastic waste as substitutes in Q3FY25.
Sanghi and Penna plants operated at 40% capacity, and four Ambuja plants were shut down during the quarter, increasing costs. These plants are expected to be fully operational in the next quarter.
The MSA volume for Ambuja and ACC combined stood at 4.5 MT during the quarter.
The company expects to receive Rs. 4,500 crores in government incentives over the next 7-9 years.

Valuation and Outlook

Ambuja Cements, part of the Adani Group, reported strong financial results for Q3FY25, with its profit more than doubling. This growth was driven by higher sales, cost-saving measures, and strategic investments. The company is improving efficiency by reducing costs through low-cost imported pet coke and increasing the use of WHRS and solar power, which will help lower fuel expenses in the coming quarters. Logistics costs are also expected to decrease through better efficiency, optimized transport routes, and freight negotiations. Recent expansions, including Sanghi, Asian, and Penna plants, have boosted capacity, with the Penna plant running at 85% clinker capacity. Despite rising raw material costs and temporary plant shutdowns, Ambuja Cement has improved profitability by focusing on operational excellence. The company’s ongoing expansion projects will strengthen its market position and help meet growing demand efficiently. With rising demand in housing and infrastructure, supported by government policies in Budget 2025, the company is well-positioned for future growth.