Ambuja Cements Ltd. shares saw a modest rise on Thursday, closing up 1.45% at Rs 355.90. This gain came despite the company reporting a substantial 90% decline in its net profit for the second quarter of the financial year 2027 (Q2 FY27).
Q2 Performance Highlights
The cement major posted a net profit of Rs 114 crore for the September-ended quarter, a sharp drop from Rs 1,158 crore recorded in the same period last year. The company attributed this significant reduction primarily to the reversal of an income tax provision amounting to Rs 1,697 crore in the corresponding quarter of the previous fiscal year.
Revenue and Operational Strength
Despite the profit dip, Ambuja Cements reported robust operational revenue, which increased by 10% to Rs 6,113 crore in Q2 FY27, up from Rs 5,579 crore in Q2 FY26. Vinod Bahety, Whole-time Director and CEO of Ambuja Cements Ltd, commented on the results, stating, "Our Q2 and H1 FY27 performance underscores Ambuja's focus on quality growth despite seasonal and external headwinds."
Bahety further highlighted improvements in revenue quality through a stronger trade and premium product mix, alongside disciplined execution and cost management that bolstered profitability. He emphasized ongoing efforts to enhance earnings through manufacturing excellence, energy efficiency, logistics optimization, and digitalization, supported by a debt-free balance sheet.
Strategic Outlook and Growth
Looking ahead, Ambuja Cements is actively pursuing its growth trajectory, having commissioned 4.6 million tonnes per annum (MTPA) in Q2 and with another 5.6 MTPA expected to ramp up in the second half of FY27. The company is on target to achieve its cost objective of Rs 4,250 per tonne by FY27.
Bahety reiterated the company's trade-led growth strategy, alongside strengthening its institutional business with a focus on value and profitability. Volumes are projected to outpace the industry in H2 FY27, driven by accelerated trade volumes and carefully managed institutional sales. Following a recent price hike of Rs 10-15, the industry anticipates further pricing improvements in the coming months.
Amalgamation Progress
In a significant corporate development, shareholders have approved the proposed amalgamation of ACC and Orient Cement with Ambuja Cements. This move advances the company's "One Cement Platform" initiative. The amalgamation schemes are subject to requisite regulatory approvals and are anticipated to be finalized within FY27.