Ambuja Cement Posts 20% Volume Growth: Should You Buy, Sell or Hold the Stock?
- 1st August 2025
- 02:30:00 PM
- 4 min read
Mumbai | August 1 – Ambuja Cements, one of India’s largest cement makers, has reported a strong start to FY26, with 20% YoY volume growth and steady operational margins in the June quarter. Backed by higher government infrastructure spending, better price realizations, and seamless integration of recent acquisitions, the company’s Q1 numbers signal operating momentum that may extend through the rest of the fiscal.
While shares of Ambuja are currently trading at ₹593, the bigger question for investors remains: is the stock pricing in this growth already—or is there more room to run?
Volumes, Pricing, and Profitability in Sync
For Q1FY26, Ambuja delivered consolidated revenues of ₹102.9 billion, up 23% year-on-year. Volumes (excluding clinker) rose to 18.4 million tonnes, led by robust demand in the southern region and effective ramp-up at acquired units.
Cement realizations rose 5% sequentially to ₹5,592 per tonne, with steady prices across regions. Lower raw material costs—especially on the back of reduced purchases and better internal sourcing—boosted margins. EBITDA grew 53% YoY to ₹19.6 billion, with EBITDA per tonne at ₹1,066, significantly ahead of last year’s ₹836.
Management attributed this performance to a mix of structural integration, cost optimization, and scale efficiencies.
“We’re seeing steady demand across key markets. The integration of Penna and Orient is progressing well, and our investments in logistics and green energy are beginning to show meaningful results,” noted the management during its post-earnings call.
Ambuja’s operational muscle has expanded significantly. With the acquisition of Orient Cement completed in April 2025, total cement capacity has jumped to 105.4 million tonnes per annum (mtpa). The company expects to reach 118 mtpa by the end of FY26, with multiple grinding units set to be commissioned in the coming quarters.
This growth is underpinned by a ₹90–100 billion capex plan for FY26, which includes brownfield expansion at Chhattisgarh, Telangana, and Madhya Pradesh, and de-bottlenecking of recently acquired plants.
Importantly, the company has already achieved ₹175–200 per tonne in cost savings, and reiterated its target of ₹500 per tonne through a combination of operational efficiency, supply chain synergies, and renewable power usage.
Green Power Push Begins to Reflect in Margins
With its renewable energy capacity now at 473 MW—covering 28% of its total power requirement—Ambuja is on a path to making green power a central part of its cost structure. Waste heat recovery systems (WHRS) alone account for 228 MW, and wind power additions have been a recent focus.
“We remain committed to scaling our renewable capacity to 1 GW by FY28, which would take our green power mix to 60%,” the management noted. This has helped contain power & fuel cost inflation, which rose just 1% YoY despite overall operational expansion.
For the full Q1FY26 report, read PL Capital’s detailed research note- https://www.plindia.com/ResReport/ACEM-1-8-25-PL.pdf
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
