Ambuja Cements Q1 profit slumps 37% as weak demand, cost pressures weigh; company stays bullish on FY27

Ambuja Cements reported a weaker-than-expected performance for the June quarter as subdued cement demand and elevated input costs weighed on earnings, although the Adani Group company maintained that its focus on premium products, cost optimisation and capacity expansion would support long-term growth.

Consolidated revenue from operations declined 7.7% year-on-year to ₹9,500 crore in the first quarter of FY27, while operating EBITDA fell 19% to ₹1,589 crore. EBITDA margin contracted to 16.7% from 19.1% a year earlier. Reported profit after tax stood at ₹660 crore, down 37% year-on-year. Profit attributable to owners of the parent declined to ₹577 crore from ₹869 crore in the corresponding quarter last year.

The company's shares fell as much as 2.98% during intraday trade to a low of ₹418.10 following the earnings announcement.

Volumes decline amid focus on value over volumes

Cement sales volume declined 7% year-on-year to 17.1 million tonnes, indicating the company's strategy of prioritising profitability over low-margin volumes. Ambuja increased the share of trade cement sales to 78%, while blended cement accounted for 85% of total sales, helping improve product mix despite weaker demand.

The company also highlighted sequential cost improvements, achieving a ₹206 per metric tonne reduction in cement costs despite headwinds from higher fuel, freight and packaging expenses triggered by geopolitical tensions in West Asia. EBITDA per metric tonne improved to ₹931, up from ₹735 in the March quarter.

Management confident on cost roadmap

Commenting on the results, Vinod Bahety, whole time director and CEO of Ambuja Cements, said the company started FY27 with "strong momentum" driven by value-led growth, premiumisation and disciplined execution.

"Despite temporary cost headwinds arising from the West Asia geopolitical tensions, we delivered a sequential cost reduction of ₹206 PMT through operational excellence, improved energy efficiency, a lower clinker factor and disciplined cost management," Bahety said. He added that the company remains on track to expand cement capacity to 119 MTPA by the end of FY27 and achieve a cost reduction of around ₹250 per metric tonne, taking overall costs to approximately ₹4,250 PMT.

Looking ahead, Ambuja said cement demand may remain soft at around 5% in FY27 amid monsoon-related weakness and geopolitical uncertainties. However, it expects long-term demand to remain supported by infrastructure spending, urbanisation and housing activity, while the company aims to outperform industry growth through premiumisation, operational efficiencies and continued capacity expansion.