/** blogpostTitle: Ambuja Cements FY26: Volume-led growth, cost reset takes center stage blogpostSlug: ambuja-fy26 blogpostCoverImageUrl: null blogpostCoverImageDescription: Ultra realistic corporate scene showing a clean financial dashboard on a laptop with two prominent charts: one line chart rising from 63.5 to 73.7 million tonnes (cement sales volume FY25 to FY26) and another line chart showing EBITDA per tonne declining from around 1,069 to 735 across quarters. In the background, a modern cement plant silhouette with conveyor structures and storage silos, plus a subtle cargo ship and rail wagons hinting at logistics and fuel supply. Neutral office lighting, no logos, no text labels. blogpostShortTitle: Ambuja FY26 volumes up, costs reset */

Ambuja Cements FY26: Volume-led growth, cost reset takes center stage

Ambuja Cements ended FY26 with a clear split personality in its numbers. Volumes were strong, helped by a larger footprint and a growing trade focus. But profitability in Q4 showed how quickly costs can overwhelm operating leverage when fuel, freight and packaging swing against the sector.

On a consolidated basis, the company reported FY26 revenue from operations of Rs 40,656 crore, up 15% year on year, and cement sales volume of 73.7 million tonnes, up 16%. Operating EBITDA for the year stood at Rs 6,539 crore with a 16.1% margin, and EBITDA per tonne at Rs 887.

The March quarter, however, was weaker on margins. Q4 FY26 revenue rose 9% year on year to Rs 10,915 crore, but EBITDA declined 22% to Rs 1,464 crore. EBITDA per tonne dropped to Rs 735, versus Rs 1,028 in Q4 FY25. The investor deck and management commentary linked this to fuel cost inflation tied to the West Asia conflict, packaging supply constraints, and operational issues in acquired assets that are still being stabilized.

FY26 performance: growth held up, margins did not

Ambuja’s consolidated volume trajectory remained healthy through FY26. Quarterly cement sales moved from 18.4 million tonnes in Q1 to 19.9 million tonnes in Q4. The company framed FY26 as 16% volume growth, ahead of industry growth.

Profitability was more volatile. EBITDA per tonne stayed above Rs 1,000 in the first half, then fell sharply in the second half, with the weakest point in Q3 at Rs 718 per tonne and only a modest recovery to Rs 735 in Q4.

Reported PAT for Q4 FY26 was Rs 1,857 crore, up 37% year on year, but normalized PAT was lower at Rs 569 crore, down 34%. The gap reflects multiple non-recurring items. Management and the reconciliation tables highlight significant one-time tax provision reversals in FY26 linked to mergers and tax shields.

What drove Q4 margin pressure

The company’s Q4 cost bridge in the deck provides helpful granularity. Raw material cost per tonne declined 9% year on year to Rs 649, but that benefit was more than offset elsewhere.

Power and fuel cost per tonne increased 4% year on year to Rs 1,314. Freight and forwarding increased 3% to Rs 1,310 per tonne. The sharpest increase came in other expenses, up 25% year on year to Rs 875 per tonne. Management attributed this to higher packing material costs, shutdown-related costs, and additional taxes in certain states.

In the earnings call, the CEO also acknowledged that the turnaround of acquired assets has taken longer than expected and required more maintenance work. The call repeatedly returned to the operational drag from Sanghi and Penna, particularly on utilization, heat consumption and maintenance.

One Cement Platform: consolidation and stabilization phase

FY26 also mattered because the consolidation program moved forward. Sanghi Industries was merged into Ambuja effective March 12, 2026 and Penna Cement’s merger became effective April 10, 2026. ACC and Orient Cement amalgamation schemes are approved by the respective boards but are still awaiting regulatory clearances, with management expecting completion over FY27.

Operationally, Ambuja highlighted cement capacity of 109 MTPA as of March 31, 2026. The deck lists multiple projects planned for commissioning in H1 FY27 including grinding additions at Dahej, Bhatinda, Salai Bawna, Kamlobli, Jodhpur and Warisaliganj, plus an additional clinker unit at Maratha. The company indicated this would take capacity to around 119 MTPA, while noting that 1.6 MTPA of higher-cost capacity (Jamul and Sindri) may be used selectively.

Utilization is the near-term lever. Consolidated capacity utilization was stated at 77%, up sequentially, and the company reiterated an ambition to move toward 85% over time. The deck also highlights Sanghi utilization improving from 43% in Q4 FY25 to 57% in Q4 FY26.

FY27 outlook: soft demand, internal execution focus

Management’s tone on FY27 was cautious on demand. The deck expects cement demand growth of about 5% in FY27, factoring weak monsoon forecasts and continued fuel price volatility due to the West Asia conflict. In the call, management similarly pegged industry growth at about 5% to 5.5%.

Despite that, Ambuja guided to consolidated volumes of about 80 million tonnes in FY27, up from 73.7 million tonnes in FY26, supported by ramp-up of new capacity and improved utilization in acquired assets.

Costs are the other key focus. Management stated FY26 cost was about Rs 4,400 per tonne and said the March quarter cost was around Rs 4,500 per tonne, describing it as a peak level. They guided to a cost reduction of about Rs 250 per tonne in FY27 from that peak. Separately, the deck states that cost initiatives, net of geopolitical impacts, could reduce total cement cost by Rs 150 to Rs 200 per tonne in FY27.

The levers cited include fuel mix optimization, higher renewable energy usage, lower logistics costs via rail and sea, fly ash cost reduction enabled by rail infrastructure, and stricter production and inventory management. The company also highlighted rising green power share and digital initiatives such as CiNOC and ePOD, with the deck claiming ePOD reduced invoice processing time by 30% and document management costs by 40%.

Capital allocation is being moderated. Management stated FY26 capex was about Rs 7,500 crore and guided FY27 capex of about Rs 6,000 to Rs 6,500 crore. Karan Adani also stated that project IRR has to be 18%, positioning the reset as a move toward disciplined returns rather than only scale.

Key investor takeaways

Ambuja’s FY26 showed the advantage of scale in driving volume, but also exposed the cost and execution sensitivity of a fast-expanding cement platform. The company ended the year with strong reported earnings, but a material portion of FY26 PAT was influenced by one-time tax adjustments, making normalized performance more relevant for judging underlying trends.

FY27 is framed as a year of internal execution. The key monitoring points are clear from management commentary: stabilize acquired assets, ramp up H1 FY27 projects, improve utilization, and bring costs down from the Q4 peak. With demand expected to remain soft, the ability to deliver on cost targets and operational improvements will likely define whether the One Cement Platform narrative translates into steadier profitability.