Ambuja Cements delivers strong Q2, raises FY28 capacity goal; PL Capital stays bullish

Mumbai | November 4

Shares of Ambuja Cements Ltd. surged up to 3% on Tuesday after the Adani Group-owned cement maker posted a strong Q2FY26 earnings beat, led by volume growth and cost efficiencies.

The stock hit an intraday high of ₹582.75, marking its sharpest move since October 29, before cooling to ₹577.20, still 2% higher. Trading volumes spiked nearly 13x the 30-day average, giving the company a market cap of ₹1.4 trillion.

Profit Jumps Fourfold, Margins Expand

Ambuja Cements’ consolidated net profit jumped 268% year-on-year to ₹1,766 crore for Q2FY26, compared with ₹479 crore in the same quarter last year. This includes a one-time income tax reversal of ₹1,697 crore.
Operationally, performance was robust — EBITDA rose 58% YoY to ₹1,761 crore, while margins expanded to 19.2%, driven by lower raw material and logistics costs.

Revenue from operations climbed 25% YoY to ₹9,129 crore, supported by a 20% increase in cement volumes and a 57% rise in ready-mix concrete sales.

Capacity Push and Cost Edge

The company’s total cement capacity now stands at 107 million tonnes per annum (MTPA) and is on track to reach 118 MTPA by FY26 and 155 MTPA by FY28.
Trial runs for a 4 MTPA kiln at Bhatapara have already begun, while grinding units at Salai Banwa, Marwar, Dahej, and Kalamboli (total 7 MTPA) are expected to go live by Q3FY26. An additional 5.6 MTPA from Bathinda, Jodhpur, and Warisaliganj will follow in Q4FY26.

Ambuja aims to cut total costs from around ₹4,000 per tonne by March 2026 to ₹3,650 per tonne by FY28, supported by 60% green power, improved logistics, and debottlenecking across 15 locations.

In an official statement, Vinod Bahety, Whole Time Director & CEO, said:

“Despite the headwinds from prolonged monsoons, the sector will benefit from several favourable developments, including GST 2.0 reforms, the Carbon Credit Trading Scheme (CCTS), and the withdrawal of the coal cess. Our capacity expansion is well-timed to capitalise on this positive momentum. We have increased our FY28 target capacity by 15 MTPA from 140 to 155 MTPA through debottlenecking at a much lower capex of USD 48/mt. Additionally, 13 new blenders at our plants will help optimise mix and increase the share of premium cement, improving realisations.”

Sector Outlook: Riding the Infrastructure Boom

With infrastructure projects driving cement demand, the outlook for the sector remains strong. Reforms such as GST 2.0, the Carbon Credit Trading Scheme (CCTS), and the withdrawal of the coal cess are expected to support industry-wide profitability and reduce operational costs.

Ambuja’s management remains confident that these developments, coupled with cost optimisation and efficiency gains, will help sustain margins and improve cash flow generation in the coming quarters.

PL Capital’s View: “Integration Gains, Strong Growth Visibility”

According to PL Capital, Ambuja delivered a “strong operating beat” in Q2FY26, driven by 20% volume growth (ex-clinker 16.6 MT) and a 58% jump in EBITDA.

The integration of Orient, Penna, and Sanghi Cements into the Adani Cement ecosystem is now fully complete, leading to stronger brand realisations and cost synergies.

PL Capital expects Ambuja to deliver 14% volume CAGR and 26% EBITDA CAGR over FY25–FY28, supported by cost discipline, green energy expansion, and ongoing efficiency measures.

“Ambuja continues to strengthen its cost competitiveness, scale, and market leadership. We maintain our “Buy” rating with a revised target price of ₹718, valuing it at 17x EV/EBITDA (Sep’27E),”

Bottom Line

Backed by strong fundamentals, margin resilience, and a focused expansion strategy, Ambuja Cements remains among the top cement plays in India’s infrastructure growth cycle.
With operating synergies from the Adani Group ecosystem and aggressive capacity expansion, PL Capital sees an upside potential of around 25% from current levels, reinforcing Ambuja’s position as a long-term compounder in the cement space.

Read PL capital full report on Ambuja Cement here