Ambuja Cement Posts 236 Crore Rupees Profit as September-Quarter Margins Fall
Key Facts
Ambuja Cements reported results on October 29 for the second quarter of fiscal 2026-2027, ended September 30, 2026, posting consolidated net profit of 236 crore rupees, compared with 2,336 crore in the year-earlier period. Operating revenue was 9,197 crore rupees, versus 9,175 crore, remaining nearly flat year on year as profit declined. The company said net profit in the year-earlier quarter included a reversal of an income tax provision worth 1,697 crore rupees, raising the prior-year comparison base. Operating indicators also showed a contraction in profitability, with margins and earnings per tonne declining. The results thus show a gap between stable revenue and pressure on profit during the quarter.
Earnings before interest, taxes, depreciation and amortisation were 1,271 crore rupees, with the margin falling to 13.8% from 19.2% in the second quarter of the previous fiscal year. Operating earnings per tonne also fell to 770 rupees from 1,061 rupees a year earlier. The company attributed margin pressure to higher petcoke and coal prices, limited coal availability, and increased diesel and packaging costs. Total cost was 4,410 rupees per tonne during the quarter; the company said it would have been 4,182 rupees per tonne excluding the impact of geopolitical conflicts. The figures put fuel and logistics costs at the centre of the explanation for weaker profitability, even as operating revenue remained close to its year-earlier level.
In sales mix and energy, premium products rose to 37% of trade sales in the second quarter from 35% in the year-earlier period. Green energy's share also increased to 61% from 41% a year earlier. In the first half of fiscal 2026-2027, consolidated operating revenue was 18,697 crore rupees, compared with 19,464 crore in the previous first half. Earnings before interest, taxes, depreciation and amortisation for the same period fell to 2,860 crore rupees from 3,722 crore. The half-year comparison shows that weaker profitability extended beyond the September quarter, while the higher shares of premium products and green energy point to a shift in the business mix.
The results follow the company's second-quarter fiscal 2025-2026 report of revenue of 9,174 crore rupees and earnings before interest, taxes, depreciation and amortisation of 1,761 crore, up 58% year on year at the time. Sales volume in that quarter was 16.6 million tonnes, according to the company's earlier statement. This context highlights a clear difference between the growth in operating earnings in the earlier comparison and current pressure on margins and earnings per tonne. On the sector outlook, the company said near-term conditions face challenges from geopolitical conflicts, global uncertainty and higher energy costs. It added that structural demand is underpinned by infrastructure spending, urbanisation, rural housing and industrial activity.
On expansion, Ambuja commissioned new capacity of 4.6 million tonnes a year during the quarter. It said a further 3.2 million tonnes a year is undergoing ramp-up in the second half of fiscal 2026-2027, with another 2.4 million tonnes a year expected to be commissioned in the same half. The chief executive said the company is targeting a cost of 4,250 rupees per tonne by fiscal 2026-2027 and expects its volumes to grow faster than the sector in the second half. He added that execution of BCFC infrastructure, a larger share of renewable energy, ramp-up of new capacity and associated additional incentives are expected to support performance in that period. Converting new capacity into stable production is a practical focus in tracking the second half, alongside the stated cost target.
The company forecast industry growth of about 5% for fiscal 2027, but said geopolitical challenges and early forecasts of a below-normal monsoon weigh on the near-term outlook. Its expectation that Ambuja's volumes will grow faster than the sector in the second half is linked to its statements about growth in trade volumes and control of institutional sales. At the same time, it said spending on infrastructure, urbanisation, rural housing and industrial activity supports structural demand for cement. Together, these factors provide the backdrop for its operating outlook, while energy and fuel costs remain among the near-term pressures cited by the company. The second half of fiscal 2026-2027 is set to test the company's ramp-up of new capacity and delivery of its stated cost target.