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Ambuja Cements- Strong volume growth continues with focus on cost optimisation


Volume growth remained healthy at ~13% YoY (+13% QoQ) in Q4FY25, led by demand pick-up and additional volume of 1.6 mtpa from Sanghi Industries & Penna Cement
Realisation remained down 1.3% YoY but improved 2.6% QoQ, mainly led by increase in share of premium products and improvement in prices during the quarter
Thus, revenue was at Rs 9888.6 crore, up by 11.2% YoY (+16.3% QoQ)
EBITDA/ton improved by 86.1% QoQ to Rs 999/ton, led by lower costs and improvement in realization. Subsequently, EBITDA was up 110.9% QoQ to Rs 1867.6 crore
Looking forward, we expect company's operational performance will continue to improve during FY26E-27E. Volume growth is expected to remain healthy, supported by an increase in demand and a continuous expansion in capacity. Company targets 118 mtpa of capacity by FY26E (from 100 mtpa at present). By FY28E, company aims to reach 140 mtpa
Improvement in realizations and continuous focus on operational efficiencies in terms of logistics and power & fuel (management guided Rs 500+ reduction in total cost/ton at the group level in the next 3 years)
We maintain Buy on Ambuja Cements with a revised target price of Rs 650
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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