Ambuja Cements expects volume growth to outpace industry in H2
MUMBAI: Ambuja Cements Ltd expects sales volumes to grow faster than the industry in the second half of fiscal year 2027 (FY27), as it looks for a recovery in institutional demand following a weak first half. The Gautam Adani-owned cement maker is seeking to rebuild volumes while maintaining profitability.
Trade volumes grew 8.6% year-on-year in the September quarter (Q2FY27), but weakness in institutional sales kept overall volumes broadly flat. Ambuja expects both trade and institutional sales to grow in the third and fourth quarters.
In the cement industry, trade sales are made through dealers and distributors to individual homebuilders and small contractors. Institutional, or B2B, sales involve bulk supplies directly to large customers, including infrastructure developers, government projects and real estate companies.
“If you now see the shift which is happening in Q2, trade is positive 8% and B2B still say negative and overall we are, let us say, flattish kind of thing. And now in Q3 and Q4, both of them will start becoming positive and therefore the overall volume growth will be positive,” chief executive Vinod Bahety said during the company’s earnings call on Thursday.
The forecast signals a recalibration of Ambuja’s sales strategy. Earlier in the year, Ambuja pulled back from institutional sales that did not generate adequate returns. The company now plans to rebuild that business through a more selective approach, while continuing to prioritize trade sales and higher-value products, Bahety said.
The changing mix is already visible in the numbers. Trade accounted for 74% of sales in the September quarter, up six percentage points, according to management. Premium products made up 37% of trade sales, compared with 35% a year earlier, while blended cement’s share rose to 82% from 77%.
Ambuja, India’s second-largest cement maker, reported a 90% year-on-year decline in consolidated net profit attributable to owners of the parent to ₹193 crore for the quarter ended 30 September, from ₹1,774 crore a year earlier, according to exchange filings.
The year-earlier quarter’s net profit comprised a reversal of income-tax provisions worth ₹1,697 crore, the company said. The latest profit was below the Bloomberg consensus estimate of ₹349.85 crore, based on estimates of 20 analysts.
Revenue from operations rose marginally to ₹9,166 crore from ₹9,130 crore in the same quarter a year earlier.
Ambuja’s larger peer UltraTech Cement also missed September-quarter profit estimates amid higher fuel, freight and raw-material costs. Strong volume growth during the quarter cushioned the impact.
“The impact could be more pronounced for other cement makers, which have fewer cost-saving levers than Ultratech. Its scale could allow it to negotiate forward fuel contracts and better manage input costs, giving it an advantage over smaller peers. Cost pressures are expected to persist through the second half of the fiscal year, weighing on industry profitability," said Ritesh Shah, joint head of research, analyst - materials, Investec India had told Mint earlier.
Ambuja commissioned 4.6 million tonnes of capacity during the September quarter. Another 3.2 million tonnes at Bathinda in Punjab and Jodhpur has stabilized, with management expecting the facilities to ramp up in the second half. A further 2.4 million tonnes of capacity at Varkala in Bihar is scheduled to be commissioned during the period.
“Incremental expansion announcement is thoughtful factoring capex intensity, cement / clinker ratios and group synergies. Adani assets have a lot of potential, which has gradually been unlocked, and its translating to actual performance is a key monitorable,” Shah said.
Higher fuel and logistics costs continue to weigh on the cement industry. Ambuja said it had realized a cement price increase of about ₹10 per bag in October and was continuing to work towards its full-year operating cost target of ₹4,250 per tonne.
Dipali Banka is a Mumbai-based journalist who treats corporate reporting less like a beat and more like a puzzle to be solved. This invariably means she has to read through annual reports and speak with leaders and analysts. She tracks policies, deals, and the pulse of industries spanning metals, mining, paints, and cement, alongside aviation. She started out as an intern at The Statesman and then completed her postgraduate diploma in journalism from Asian College of Journalism, Chennai, in 2025. Relentlessly curious at heart, Dipali is driven by the simple urge to understand how things work and who they impact. Armed with an enduring fascination for steel and aeroplanes, she moves through the churn of daily news with focus, turning complexity into clarity without losing the story. She is particularly committed to shaping numbers into objective narratives, having little appetite for vagueness that gets in her way.<br><br>Outside the newsroom, Dipali is an unapologetically loud presence who values long conversations and longer walks to unwind. She devours books of all kinds and can often be found indulging in the lyrical sway of contemporary ghazals. She ardently believes that her relationship with her bylines is more sacred than it would ever be with anyone across the human race.
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