Ambuja Cement (ACEM IN) – Q2FY27 Result Update – No respite in Q2; H2 to be better on a weak base – BUY
Published on 29 Oct 2026
Ambuja Cements (ACEM) delivered a weak operating performance again in Q2FY27 due to decline in volumes and higher operating costs. Volumes declined 1% YoY as the company continued to prioritise value over volumes and curtail low-margin institutional sales. Blended NSR remained flat QoQ due to higher premium share negated by weak cement pricing. Higher pet coke and imported coal prices increased P&F costs/t, while higher diesel costs pushed up freight costs/t and elevated packaging and maintenance costs increased other expenses/t. Consequently, EBITDA/t declined 27% YoY to INR761 (PLe INR792/t). EBITDA/t also includes contributions from green power and fly ash sales, which together contributed ~INR97/t. Management expects volumes to grow ahead of the industry in H2FY27, supported by stronger trade volumes, ramp-up of new capacities and calibrated institutional sales. ACEM has already realised a price hike of ~INR10/bag in October, with further hikes expected over the coming months. At CMP, the stock is trading at EV/EBITDA 12.5x/11.2x of FY28/29E EBITDA. Maintain ‘BUY’ with revised TP of Rs474 (Rs498 earlier) valuing at same 15x EV of Sep’28E EBITDA.
