Ladies and gentlemen, good day, and welcome to the Ambuja Cements Limited Q1 FY 2026 investor call, hosted by Prabhudas Lilladher Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Satyam Kesarwani . Thank you, and over to you, sir.
Thank you, Nidhi. Good evening, and a very warm welcome to everybody. On behalf of PL Capital, I am pleased to welcome you all to the Earnings Call of Ambuja Cements for the First Quarter of Financial Year 2026. We are very happy to have the management with us today for the Q&A session with the investment community. The management is represented by Mr. Vinod Bahety, CEO, Ambuja Cements, Mr. Rakesh Tiwary, CFO, Mr. Deepak Balwani, Head of Investor Relations. We will begin with the opening remarks from the management, followed by an interactive Q&A session. With this, I hand over the call to Mr. Deepak Balwani. Over to you, sir.
Yeah, thank you. On behalf of Ambuja Cements, I am pleased to welcome all participants to our Earnings Call for the First Quarter of FY 2026. Ambuja Cement is the ninth largest building material solutions company globally and part of the diversified Adani portfolio. Ambuja Cement is one of the four large-scale cement companies globally and the only one in India to have a science-based net zero and near-term targets validated by the SBTi. Before we start, please note that this call may include forward-looking statements based on our current beliefs and expectations. These are not guarantees of future performance and may involve unforeseen risks and uncertainties. We are pleased to have with us on the call Mr. Vinod Bahety, Chief Executive Officer, and Mr. Rakesh Tiwary, Chief Financial Officer. Now I invite Mr. Bahety to provide his valuable insights on the quarterly performance.
Thank you, Deepak. Good evening, and a warm welcome to all of you joining us for the First Quarter 2026 Earnings Call. Ambuja Cements started this fiscal year on a high note. Our momentum is built on strong value focus, robust volume growth, price improvement, deeper channel engagement, premium product sales improvement, agile supply chain, stronger brand pull market across, and smart cost efficiencies amplified by seamless integration of Orient Cement, which we acquired in April 2025. We have reimagined business fundamentals. This has helped us achieve the highest revenue in a quarter, highest quarterly EBITDA, and improve our market share by 2%. Our channel network is vibrant, our assets are reliable more, our efficiencies have improved, and our EBITDA gains are well noteworthy. This sets a bold tone for the year ahead as we scale with purpose and precision.
We are up on our demand estimates by 1%, from 6%-7% before, to now 7%-8%. Our consolidated financial performance highlights for the quarter are as under. Highest ever sales volume of 18.4 MnT, up 20% Y o Y, with market share up 2% to 15.5%. Revenue crossed INR 10,000 crores mark at INR 10,289 crores, up 23% Y o Y, with price gain of 4%, supported by higher share of premium products as a percentage of trade sales, which is now at 33%, up by 43% Y o Y. Cost has improved by INR 119 per metric ton Y o Y. This has also supported in achieving the highest quarterly EBITDA at INR 1,961 crores.
EBITDA per metric ton of cement at INR 1,069, up 28% Y o Y, and EBITDA margin stood at 19.1%, up 3.8%. We have a blueprint to achieve our targeted EBITDA of INR 1,500 per metric ton by 2028. PAT we have achieved at INR 970 crores, up 24% Y o Y. Earning per share at 3.20, up 22% Yo Y, and net worth stood at INR 66,436 crores, and we continue to remain debt-free. Our rating remains highest at CRISIL AAA stable and A1+ ratings. In the best interest of time, I am not going to discuss the standalone financial performance of the listed companies separately as they are available on the stock exchanges. The merger of Adani Cementation Industries Limited has received all the statutory approvals.
For Sanghi and Penna, we have received approval from both the exchanges, BSE and NSE, and further process of completion is ongoing. We continue to make decisive strides in operational excellence in the quarter. Some of them are as under. We are proud to be the lead cement supplier for the world's highest single arc, Chenab Railway Bridge, which speaks volumes of our product quality and trust. For the fourth year in a row, TRA Research has recognized us as the most trusted cement brand. This brand equity is also immensely supporting in terms of volume improvement and price improvements. Our privileged exclusive partnership with CREDAI has gone very well. Continuing this, we have launched Nirmaaanotsav program along with CREDAI, wherein the first event took place in Ahmedabad, and this will be hosted in almost 20 + cities going forward in this financial year.
Our supply chain is becoming smarter, leaner, and agile with AI-enabled technology. We are proud to be the first in the industry to adopt DIGIPIN. We commissioned 5 MnT of grinding capacity over the last three months and target additional another 13 MnT this financial year. We are getting younger with new assets, digitally smart platform, and latest cohort of future young leaders fueling a culture of continuous innovation and excellence. Digitalization initiatives continue to be focus area, leveraging the business growth with strong focus on EBITDA maximization, AI-driven advanced business and cost optimizer tools, end-to-end seamless applications of channel partners, and the plants of future concept is progressing very well. On growth and journey expansion, our total cement capacity currently stands at 104.5 MnT.
In our larger aim of achieving 140 MnT by FY 2028, we are well poised to achieve 118 MnT by end of FY 2026, powered by our strategic brownfield expansions across various sites including Bhatapara, Salai Banwa, Dahej, Marwar, Kalamboli, Krishnapatnam, Bathinda, Jodhpur, and Warisaliganj. Our disciplined CapEx management is ensuring these timelines are met efficiently, enabling us to deliver both scale and profitability. On the cost leadership, our targeted cost reduction journey with the planned initiatives primarily envisages reduction in power and fuel cost, logistics cost, and raw materials cost optimization. We have one of the lowest manpower costs at INR 223 per metric ton amongst the peers in the industry. Green power share upticks with every passing quarter. It improved by 9.7% to 28.1%, and it is targeted to reach 60% by FY 2028.
This will reduce the existing power cost, which is around INR 5.9 per unit to almost INR 4.5 per unit by FY 2028. The power consumption per metric ton of cement also is expected to improve by at least 5 units. This is the efficiency of the new assets and the efficiency improvement of the existing assets. Coal cost has improved from INR 1.73 to INR 1.59 per thousand kilocalories and expected to sustain near these levels. Importantly, the heat consumption will improve by at least 35 to 40 kilocalorie per kg of clinker for the various initiatives outlined, including mix of the new kilns. Primary lead distance reduced by 8 kilometers this quarter at 269 kilometers, and is expected to further reduce by almost 75 kilometers when we achieve 140 MnT by FY 2028.
This will help to reduce the logistics cost by almost INR 150 per metric ton, also supported by a higher component of rail and sea logistics. Currently, our cost is almost around, say, INR 3.25 per ton per kilometer. On the ESG leadership, sustainability remains our strategic operating system as we are India's only and globally the fourth large-scale cement company to have our science-based net zero and near- term targets valid by SBTi. We have commissioned 473 megawatts of renewable energy out of 1,000 megawatts, achieving almost 28%. As I mentioned earlier, we want to achieve 60% by FY 2028. Our green power share has risen consistently, and it improved by 9.7% this quarter. We remain an industry leader, achieving 12 times water positivity, 11 times plastic negativity, exemplifying responsible stewardship.
We continue active global collaborations with WEF, GCCA, UNGC, and AFID, reinforcing our commitment to setting and achieving ambitious environmental goals. On the community and social impact, we continue to positively impact our community through engagement initiatives in education, healthcare, livelihood, and infrastructure. We are upskilling our communities through robotic labs, drone labs, rural KPOs, youth skilling, woman empowerment, creating a blueprint for our inclusive growth. Making the new era of a holistic education in the presence of our board members, we inaugurated a new building of DAV ACC Public School, Kalpashila, and a heritage wing at our Kymore plant. Through the Adani Vidya Daan initiative, our leadership continues to inspire and shape the future of more than 10,000 students across the Adani Vidya Mandirs, SEDI, campus institutions at our plants. In first quarter of 2026, we accelerated our efforts to build, recognize, and purpose-driven partnerships across our network.
CEO Se SamvAAAd, a direct engagement platform with channel partners and contractors, has deepened trust through open dialogue, recognition, and shared growth. These efforts have sparked a strong homecoming of more than 500 dealers, strengthening our distribution network and reaffirming the mutual confidence. Adani Certified Technology, ACT, was implemented at more than 21,000 customer sites, enhancing the construction durability and technical superiority, making a significant milestone in scalable impact and customer trust. With more than 325 skill-building workshops conducted, we have empowered almost 9,000 + contractors, creating ripple effects in quality, safety and upskilling across the regions. CEO Club, a first of its kind recognition platform in the industry, now anchors top performing channel partners, contractors into a unified community.
Through certified training, plant visits, safety gear distribution, and family-focused experiences, we are building a family of builders aligned with our vision. Dhanvarsha-Grihalakshmi-Saubhagya Awards embodied emotional intelligence in action. This hybrid celebration brought together over 50,000 + families of our dealers, merging performance with purpose and laying foundation for enduring relationships beyond the balance sheet. Coincidentally, today also we have a program which is for our influencers, which we will see more than 25,000 influencers online and offline coming together to celebrate a program similar to Dhanvarsha. On the industry outlook, cement demand grew by almost 4% YoY in first quarter FY 2026, driven by Pradhan Mantri Awas Yojana, Pradhan Mantri Gram Sadak Yojana, Bharatmala Pariyojana, Sagarmala Programme and other infra-projects. We remain bullish for this financial year. We are upping our demand estimate by 1% from earlier 6%-7%, to now 7%-8%.
I now invite our CFO, Rakesh, to detail our financials in detail further. Thank you.
Thank you, Vinod, for giving such a strategic and comprehensive outline for Ambuja Cements. It was really great. Good afternoon, ladies and gentlemen. It's a pleasure to connect with you all at this pivotal junction in our growth journey. Over the last few quarters, we have consistently articulated our sharp focus on four key pillars: growth, cost leadership, ESG, and stakeholder value creation. I am pleased to share that Q1 financial year 2026 has reinforced our conviction and momentum across all these dimensions. Our cement capacity has now reached 105.4 MTPA following the successful commissioning of Sankrail and Sindri brownfield grinding unit. We remain firmly on track to scale up to 118 MTPA by March 2026 and 240 MTPA by financial year 2028. Our inorganic growth story strategy is progressing seamlessly.
Sanghi, Asian Cement, Tuticorin, Penna, more recently Orient Cement, which we have successfully integrated. The results were out a few days back. Accelerating our market presence all across the geographies. Integrating synergies are being realized ahead of schedules, validating our disciplined M&A playbook. Alongside M&A, our greenfield and brownfield projects are designed with an emphasis on long-term competitiveness and roughly close to 40% of our capacity now falls under new generation assets that are optimized for capital efficiency, lower OpEx costs, increased use of renewable energy, and improved logistics including rail infrastructure. In this quarter of 2026, we commissioned 57.7 megawatt of wind energy, taking our total renewable power to 473 megawatt. Additionally, our WHRS capacity stands at 228 megawatt. Together, our green energy is contributing close to 28.1%, underscoring our position as a sustainable leader in India.
We are also laying a strong digital foundation for the future. Our end-to-end digitization of the value chain from quarry to learning is yielding measurable operational benefits and improving EBITDA delivery. Our cement network operating center is live, which is live at our headquarters, growing in scope, enabling predictive analysis, real-time visibility, and agile decision-making. This is a transformative journey, and I am proud that Ambuja is at the forefront of making this traditional industry younger, smarter and more efficient. We continue to maintain a fortress balance sheet. As of Q1 FY 2026, our net worth stands at INR 66,500 crore, up from INR 63,811 crore in March 2025. We still are debt-free with AAA rating, giving us lot of headroom to fuel growth and return value to the shareholders.
To conclude, Ambuja is uniquely positioned at the intersection of capacity growth, margin expansion, digital evolution and ESG leadership. As the industry enters an exciting new phase, we are confident that our strategy and execution will drive superior stakeholder returns in the quarter and years ahead. With that, I now hand over back to Deepak.
Yeah, Nidhi we can open the call for Q&A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Hi. Thank you for taking my question. My first question is, if we look at on a sequential basis, there is a sudden increase in power and fuel, logistics, and other OpEx, even adjusted for volumes. Can you please help us understand in detail what is happening over here? Thank you. That is my first question.
Rahul, I am presuming you are referring to consolidated finances, right?
Yes.
Okay. Just a sec. If you actually refer to Rahul, I am not sure which line items you are referring to, because there is an overall reduction in terms of the power and fuel and raw material on a Y o Y basis. If you go to slide 12 of the investor presentation.
I am looking at slide 19. I am more concerned about quarter- on- quarter change. Any color on that will be very helpful.
Just a sec. Let me just go to slide 19 of the investor deck.
Yes, that is right.
Okay. Let me just pull the particular slide, Rahul. Just a second. If you refer to slide 19, there is a reduction in the only point which is the other expense is 12%. Otherwise, there is a reduction in all the other items, Rahul?
Not really. If you look at power and fuel, it has moved from INR 1,263 to INR 1,367, then freight and forwarding.
Okay. That you're comparing Q o Q, while I was referring to Yo Y. In terms of Q o Q also, Rahul, for example, when it was INR 1,263 for the last quarter, with, for example, when you have this acquired asset, especially when you have now Orient also, there will be some disruption on the overall take cost compared to, say, March. In March, for example, you didn't have Orient, and now you have, say, Orient. Second is, if you also notice, the fuel cost, in fact, has come down from 1.74 to 1.57 actually. The second element of cost, which is the power cost.
Over there, I've highlighted that we have a higher, as of now, consumption of the power units, and some of these, again, acquired assets have that, but there is a good opportunity for us to reduce by at least 5 units minimum in coming quarters in terms of the power consumption. So both this power and fuel basically will come back to the sequential numbers very soon. In terms of the fuel, for example, we have demonstrated a sharp reduction by almost a 20 basis point this quarter compared to last quarter. Prospectively also, I'm sustaining myself at those levels. So this is like one time when you have a quarter when you have an acquired asset. Otherwise, you will have quite sustainable numbers on this front.
Coming to the other expenses where, for example, my overall branding and sales and promotion expenses, we actually are investing into our marketing and brand expenses and our supply chain network. You will see, and you have seen some uptick over there. Yeah. On top of it.
Orient.
The Orient asset also, for example, when you have acquired, it has also actually added to my overall other expenses. So this quarter you will have to look it with the color of Orient being acquired and consolidated as compared to the previous quarter. But on a Y o Y basis, you will see all of them are on a very healthy trend, even with the Orient acquisition.
No, I understand. Thank you for the color that this is because of Orient acquisition, and that is exactly why I want to understand this. What would be this number without Orient? Orient could not be that big in the overall consolidated numbers perspective, right? Any color from that perspective would be very helpful. Second, by when should we expect this number to normalize to pre-Orient acquisition levels? Thank you. These are my questions.
Yeah. No, I think coming this quarter itself, you will see a sharp improvement on that. In terms of my outline also, when I said that now the assets have started generating, giving us good results. For example, my power costing with the renewables push this quarter has come down by 80 basis points per unit. Right? This quarter itself, we will see a good level of improvement in terms of sequential quarter. That is how, for example, when we have this acquisition and when we have this integration, it will take you a couple of months here and there. If you look at the volume part, that is very interesting. All of my, for example, therefore, these acquired assets have done very well in terms of the volume part.
Integration has done very well in terms of the revenue, and therefore you have seen a 20% jump on the volume part. So far as the costs are concerned, like this quarter itself, you will see a good level of stabilizing there.
But just for the bookkeeping, what would be volumes out of Orient business this quarter?
No, I would refrain doing that because we, for example, as we have highlighted, overall 18.4 MnT, because Orient and all these are part of the MSAs. Therefore, per se, Orient doesn't have its own direct sales because we have migrated from Orient brand to Ambuja and ACC. But happy to say that these assets, for example, are operating at a very healthy level at clinker and cement both. Therefore, on an overall basis, we have a good healthy utilization of the cement capacity.
Great. Thank you so much. Just one final question. On an unadjusted basis, your volume grew by 20% year- on-y ear. Now, when you say that industry grew by 4%, where would be Ambuja consolidated compared to that 4% for the industry?
Ambuja Consol is what we have said, 20% overall improvement.
Yeah, but that's unadjusted, right? I mean, for fair comparison, when industry grew by 4%, then.
Okay. This is unadjusted, you are right. So if I adjust and if I only consider Ambuja and ACC, the erstwhile capacity, it comes to almost 13%. One thing.
Got it. Thank you so much. This is very helpful.
Thank you.
Thank you. Ladies and gentlemen, please limit to two questions per participant and rejoin the queue for the follow-up question. The next question is from the line of Atishy Rathi from JP Morgan. Please go ahead.
Yeah, hi. Thank you for the opportunity. I just had one question. This is pertaining to slide 18 of the deck. I notice the sales volume on a consolidated basis is 18.2 for the last quarter in the deck. But if I look at the last quarter's deck, the number was at 18.7 and the total EBITDA hasn't changed. I am just trying to understand how should I reconcile the two numbers?
Yeah. Hi, thanks. Basically what we have done, because so far CLC, which is clinker plus cement, both were considered, but we are not in the business of selling clinker. We are more in the business of cement and therefore like all the other competitors, we also now will move into reporting in terms of factor of cement. Therefore, for example, what we have done is also for the March, 18.2 is our cement sale. The difference between cement and clinker, the 0.5, primarily is actually for the CLC factor and therefore, 18.4 when I am saying is purely a cement sale. There is no clinker factor here. That's how the whole basic calculation is.
Understood. Thank you so much.
Thank you. That is how all the other industry players, what I understand, they do it and that's how we have also recalibrated and put it on basis of the cement volumes and therefore EBITDA and everything as a factor of cement.
Understood. Thank you so much.
Thank you. The next question is from the line of Harsh Mittal from Emkay Global. Please go ahead.
Yeah, thank you for the opportunity. Good evening. Firstly, congratulations to the management for a great set of numbers. My question was pertaining towards the earlier participant's concern on the volume front. Continuing with his statement, if I just exclude Orient's and Penna Cement's volume, in this quarter, we are standing at around 1.5% of volume growth Y o Y. Is it a fair set of assumptions, sir?
No. Absolutely not. In fact, as I said, if I adjust, for example, the acquired assets, I am sitting on still a very good healthy volume growth of 13%.
What would be the volume for Penna Cement this quarter? If you can just share that number.
Penna, Orient, Sanghi for example, as a pack for example, we are at 18.4 MnT for a capacity which has now gone up to 105 and you can safely assume that the average capacity would have been almost say 95. Therefore on a overall capacity utilization, I am around 77% to 78%.
Yes.
Please allow me to give a larger volume instead of going with because all of these are companies under the MSAs, so it will be inappropriate to give you for individual unlisted company. It will be better to speak on a consolidated volume and a consolidated capacity. I can give you this number that around 78% is the capacity utilization.
Sure, sir. That was my question. Thank you.
Yeah. This will answer you and now you can do your math actually.
Yes, sir.
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Yeah. Hi. Thanks for the opportunity. The first question is on capacities. I see that the timelines are no longer indicated in the presentation as to what is the commissioning for each of those capacities which you were giving earlier. So what is the updated timeline now? If you could shed some light on that.
Okay. Amit, perhaps I think because we are actually hitting now, so out of say earlier we used to indicate almost 18 MnT out of which 5 Mnt has already been achieved. So 13 MnT is also in fairly advanced stages. Of each passing month, I am going to announce the commissioning. So I can tell you that this quarter you will see some of these capacities and by, for example, December, most of my capacities will be there, including Salai Banwa, the Penna Jodhpur, the Bhatapara, and couple of more. Then by March, whatever we have indicated here is what, for example, we are going to achieve. So 118 MnT by fiscal year FY 2026 is there to be achieved.
Sure. Got it. Bhatapara, it is facing some delays is what I understand because if I remember right, you had earlier indicated March 2025 as commissioning. So why is this getting delayed? Frankly, the concern is more around because I want to understand is that the Chinese equipment is what these plants are based on, and we have been reading that Chinese engineers are not being allowed into the country. So is it something to do with that or is there any other issue over here?
No, per se not. In fact, we already have this particular company who is the vendor which you are referring to, already a vendor to us for a couple of our other assets. So we do not see any issue on that. This March, what you are indicating is something which is our management target and so far as but the outline timing is concerned, we are well on that. I do not see per se any issues over there. So to rest you on any anxiety, no concerns on the vendor, no concerns on the execution and completion. Of course, projects of this scale, for example, when you have a brownfield expansion, a couple of months here and there because you are operating for you are actually executing in an established asset, which also should not be delayed in any form and manner.
So these are very nominal months, couple of months here and there. I do not see any issue or any anxiety over there.
No, thanks for clarifying that. Very comforting. Also, if you could provide the cash position at the end of June.
Amit, we can pick up from where we left, and I think March end was almost INR 10,250 odd crores, if I remember. From there, for example, when I look at the overall, say, cash flow, we are sitting right now closer to INR 3,000 odd crores, and this includes the overall acquisition of Orient, then also my CapEx of almost INR 2,000 crores, which has been for the June quarter, then almost INR 600 crore, INR 550 to be precise, for the dividend, and so on and so forth. Overall, basically right now we are holding INR 3,000 odd crores of cash and cash equivalent. Yeah.
Sure. Lastly, what was the effective date of Orient?
Sir, sorry to interrupt.
Okay, final.
Can I request you to rejoin the queue for the follow-up question?
Sure. Thank you. Thank you so much.
Thank you. The next question is from the line of Navin Rameshwar Sahadeo from ICICI Securities. Please go ahead.
Yeah. Good evening, Vinodji, Rakeshji. Thank you for the opportunity. Two questions, and I think that is similar to what Amit was trying to ask. Is the effective date for Orient, is 22nd April to be merged or consolidated, or will it be 18th June, to understand the integration better?
Yeah, Navin. It is 22nd April.
Understood, sir. My second question was on the overall cash outflow towards capacity creation. As you mentioned, current cash balance is more like INR 3,000 crore. Just wanted to understand how much do we have to pay for Penna, because I believe there was some retention money and of course, subject to the capacities which were to get commissioned. To cut to the question is, how much money for Penna is likely to be paid? I am assuming it will happen this year. When will the Penna capacities, especially the clinker in north, will come on board?
Navin, clinker should be coming to us in, let us say, Q2 itself, say by fag end of September. So far then there are a couple of other assets like Krishnapatnam, which will be there, and a small CapEx at [Tandur]. These are all actually going well so far as Penna assets are concerned. When we have factored in the CapEx program, the balance small payments which are left to be paid, those will be paid within the overall guide our contractual terms of the SPA. Yeah. But in terms of the progress on the Jodhpur asset, it is absolutely bang on time, progressing well, and personally also I visited a couple of times, a beautiful asset which has come out actually. This is like a technology.
No, great. Only one related, just clarification. So of course you said Penna is the balance payment is included. Is it safe to assume INR 10,000 crore kind of CapEx for FY 2026 as a number?
You can consider maybe couple of thousands. You can actually consider ballpark INR 1,000 here and there. So INR 10,000 is a good amount to assume. I would have considered between say 9 to 10, but 10 is okay.
Helpful.
That includes Penna also.
Penna, of course. So all in INR 9,000 crore kind of an outflow for FY 2026. Thank you, sir. Thank you so much.
Yeah.
Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Good evening, and congrats on good set of numbers. Firstly, could you share the volume numbers for the full- year now adjusted for the clinker sales? Secondly, can you share for the two listed subsidiaries, Orient and ACC, what would be the CapEx in these two companies individually, and what are their capacity enhancements for Orient particularly? There were talks of a grinding unit and a clinker expansion in Karnataka and a grinding unit in MP. Similarly for ACC, any progress on the Wadi clinker or any other assets beyond what we have recently commissioned?
Yeah. Thanks, Rajesh. To first start with, your question was about the overall volume.
Consolidate volume, ex of clinker sales for full -year.
Yeah. For the full- year, while in terms of the capacity, as I mentioned, we are targeting to hit 118 MnT. Yeah. What is my overall estimated volume? That is like, for example, you can broadly consider a current trend of 75%, 78% and that you extrapolate that.
Okay.
As far as the second question, which is about the CapEx at Orient, I think right now our priority is to improve the overall efficiency at Orient than immediate expansion. Therefore, this financial year, it is more of achieving the desired cost numbers and some of the debottlenecking. But definitely, there is an opportunity for us as the previous promoters also were doing in terms of expansion at Chittapur and a bit of at, say, Devapur. But that is like, we will look at it in the next financial year. As far as MP is concerned, again, that's for example, we will work it on, but not an immediate priority. The immediate priority for us right now is the seven, eight sites which I mentioned to you.
Which are strategically well located and integrates very well in our overall plan of 140 MnT. Yeah. But more detailed plan for Orient in terms of the growth will come out separately.
Sorry. ACC?
Is that good for you? Okay.
Yeah. ACC.
Any other question?
ACC. CapEx at ACC, yeah.
As far as ACC is concerned, as you know, Ametha was the one which we did, followed by acquisition of Asian, and now Salai Banwa right now is progressing very well and in next few months, you will see Salai Banwa up and running. Salai Banwa, as you know, is in stream. Then again, for ACC, I've been highlighting our focus has been in terms of improving its, again, cost efficiency, its green power, WHRS. Apart from Salai Banwa, if you also know Sindri, we have expanded when we announced.
Right.
In terms of expansion. Sindri, Salai Banwa, Wadi line is also very much in the plan, and that is in the drawing boards. I have highlighted before the dismantling of the line one is already been commissioned. Therefore, that is very much in the pipeline, but not for this financial year. It will be limited initial groundwork, but it will come in the next financial year. These are like the CapEx program for ACC, but more importantly is on the efficiency factor because the bridge between the overall EBITDA for ACC versus other peers is what, for example, we will bridge it very fast. As you see that in last many quarters, ACC has been catching up on that. Out of these 9,000-10,000 crore, how much of the CapEx one can work out in the standalone ACC and.
Sir, sorry to interrupt, but I request you to come back to the floor.
I am just completing this follow-up.
Yeah. Okay. Nidhi, I will just answer that. Rajesh, generally you will have a factor of 75-25 between parent company, which is like Ambuja and ACC. Sometimes 70-30 or 75-25 kind of thing.
Okay. Great. I will come back in queue, sir. Thank you. All the best.
Sure.
Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. A couple of questions. Sir, first is on ACC. There was a significant cost bump on a sequential basis for both raw mat as well as other costs. How should one look at it? Is it by any means tied to a few clinker units that we have actually shut down in south? Is it because of higher inter-regional trade, higher clinker cost? How should we treat it to that?
Sometimes Ritesh, as you know that given the early set of monsoon, which started in June, basically, what we've also done is, in terms of the scheduled maintenances and therefore like Wadi and all, for example, which is ACC, we have actually done that. Therefore, you will find a bump whenever you have a scheduled maintenances, you will generally find a bump in the particular quarter, but on an overall year basis, you will see it gets neutralized basically. So the benefits of that will come in the subsequent quarters. So that was like, say one part.
Again, in terms of the other expenses, I actually mentioned earlier that some of the, especially for ACC, in terms of the settlement cost, the VRS, the employees separation, and also in terms of the brand promotion and sales promotion activities which will get intensive this year and lots of investment is being done on the brand equity, on the channel vibrancy. I also put them in my initial remarks, and you're already seeing results of that in terms of the price improvement, in terms of the overall, say, volume improvement. This will continue. So the delta positive impact is coming on the revenue part, while some of the investments will happen in terms of this brand and sales promotion. Yeah. So those are basically the trend.
Sir, my question is, basically, we have taken out Wadi-1, Bargarh and Chaibasa. So how are we substituting that clinker for the hues in South for ACC?
Yeah. Therefore, if you see in the MSA, there's also a good movement of clinker between Ambuja and ACC. So the high cost clinker, which goes off of ACC, almost like if I have to highlight between ACC and Ambuja this time, clinker movement has been almost 0.47 MnT. So it gets supplied, for example, Bargarh and Chaibasa. So I have, say, Penna sets now. I have got, say, Orient also. So sometimes when Wadi is down and I have, say, Chittapur for Orient, which is available to supply, so on and so forth. Therefore, the logistics-wise, whichever is best suitable is what is being used in terms of the clinker movement and therefore supplies of cement. So don't worry. If you look at overall balance of the cement versus clinker, it is well-balanced.
Sir, my second question is.
64 MnT of clinker capacity, and I have almost 105 MnT of cement capacity. You can apply the factor, and then it is well-balanced. Sorry.
Yeah. Sir, quickly, second question. Yeah. Hi, sir. Am I audible?
Yes, please.
Hello.
Go ahead.
Yeah.
Go ahead.
Sir, during the Marwa day, you had indicated that we are looking to simplify our marketing structure. We will have only three layers. Have you already progressed on that? What should we make out of that particular outcome? That is one. And other quick one is, one of our peers has announced commercialization of calcined clay. You did elaborate quite a lot on ESG. Is this particular variable up for us on priority? If not, why so? Thank you.
No. Ritesh, as you know, calcined clay or otherwise, if you have fly ash then PPC, I think I would say that I am sitting on a huge opportunity of fly ash, and therefore, those who do not have the opportunities, they will look around for different types of products. But we have a natural advantage and as a group synergy. Therefore, I would right now focus on and there is no better substitute to fly ash, actually, because the whole chemical process of fly ash, which blends with cement, the cement quality and the cement strength is far, far superior, and which is well demonstrated in many labs also. Point number one. Therefore, the calcined cement and all the specific applications and all are, for example, different to what normally a cement can be. Point number two. What was your second question, Ritesh?
Three layers.
So three layers. That is like.
On the marketing side.
That is more internal, Ritesh. I think not right to discuss on this forum. But yes, we are simplifying and as I said, we are reimagining the whole structure, the whole org structure, the whole plant structure, and you will see prospectively a positive impact and results out of it. But exactly, that's not the point to discuss on this forum, Ritesh. Offline, we can connect on that.
Yeah. Sir, can I just squeeze in one? In your initial remarks, you indicated.
Sir, sorry to interrupt, but I request you to come back for the follow-up question, please.
Sure. Thank you.
Thank you. Ladies and gentlemen, please limit to one question per participant, and rejoin the queue for the follow-up question. The next question is from the line of Raashi Chopra from Citigroup. Please go ahead.
Thank you. Just had a question on realizations post the quarter. How have the realizations been across different geographies?
Raashi, thank you. I am very upbeat about realization, although definitely through your channels you will get a different impression. But especially when we are focusing on solutions oriented as a cement and therefore, for example, at least we have the strong brand equity, and we are actually able to get the right price. And we have also upped the price of our premium cement, while you would also hear this positive from our side. I think realization is better off only, and it will remain better off for the leaders and those who are decisive in terms of providing high quality premium cement and addressing the solutions. And with good investment on brand equity, I think it is also seeing a good churn and volume movement. That is my submission overall. But you will see different views from different corners of the industry.
I would refrain because sometimes we are now following and bringing a good discipline in terms of adhering to the whole channel network and in terms of pricing and all. That will continue as a trend from our side.
Just to understand this, are prices today better than what you exited in the June?
I will not say because that is, again, I am saying June, you have seen a healthy improvement in prices. I can only say that our focus in terms of continuously addressing the requirements of the customers is only going to help us and differentiate us better as compared to the industry in terms of prices. I remain positive on demand, and I remain positive on this factor also.
Correct. Just on the cash that you said, INR 3,000 crores, this is on a consolidated basis including Orient?
Now, because this call, generally, we always speak about consolidation because companies have their own MSAs and different companies are investing and they share the assets and also MSAs, it always makes sense to discuss consolidation.
On the cash balance of INR 3,000 crores, is it possible to split it up between ACC, Ambuja and Orient?
I would say that as of now, I do not have direct information. But yes, it is broadly between Ambuja and ACC, you can say 60-40 or 50-50. So that is the trend. Sanghi and Orient and Penna, for example, they would not have, barring the working capital, because the cash flows have been used to make them debt-free also, Raashi. Therefore, the major cash is lying with Ambuja and then ACC. So that is like, for example, a broad split. Sanghi, Penna, and Orient would not be sitting on that, otherwise bare minimum working capital.
Got it. Thank you.
Thank you. The next question is from the line of Jashandeep Chadha from Nomura. Please go ahead.
Yeah. Thanks for the opportunity and congratulations on a good set of numbers, sir. My first question is regarding the cost-saving target which we gave last year or maybe last to last year of INR 530. But then I understand there are some consolidation costs and higher fixed costs because of the assets that you
Jashandeep, we are not able to hear you.
Sir, the current participant has been disconnected from the line. Can we move to the next one?
Yes, Nidhi, please move to the next one.
The next question is from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.
Good evening, sir. Good set of numbers. I just wanted to understand what has been the contribution of South based plants in console EBITDA per ton. Since you are expecting that the prices in the South will further strengthen, will that have a significant impact on your EBITDA per ton? The second part is that while we have taken an estimate of EBITDA per ton improvement of almost 530 till FY 2027, I think this year alone, from cost, we should be somewhere. Price increase should commensurate to the overall EBITDA per ton with cost. So what is your sense that where should we end this year in terms of overall console Ambuja EBITDA per ton?
Thank you, Jyoti. Jyoti, as you know, South is now we have a good large share as part of my overall capacity, almost 26%, wherein while West is 23%, which is disclosed on slide 15 of my investor deck. Now, definitely South has been a good contributor for the June quarter. But South, you know that how it works because of the excess capacity, therefore you cannot predict in South generally. But I am bullish with respect to demand, and therefore I am also positive with respect to prices. I will not comment about the overall price expectations or the EBITDA expectations, but I can only say that the EBITDA which we have highlighted and given and reported is what the EBITDA we are targeting to sustain and improve from here. Therefore, both demand and prices, I am positive.
Giving specific numbers will not be possible and will also not be appropriate.
Okay. Thanks, sir.
Thank you. The next question is from the line of Jashandeep Chadha from Nomura. Please go ahead.
Yeah, hi, sir. Am I audible now?
Yeah, Jashandeep.
Yes. Hi. Sorry for that and congratulations on a good set of numbers. Sir, firstly, I want to ask about the cost saving, the target that we gave of INR 530 per ton. I understand, in the last few quarters, there have been some consolidation costs because of the assets you have acquired. If we want to do an apple-to-apple comparison from FY 2024 base, how much of the cost benefits would have come in based on the initiatives that you've taken? Under what major heads will those be? If you can give insight on that would be great, sir.
Yeah. Jashandeep, you're right. The journey of 530 continues. If I have to give a broad range, we would have hit almost 35%-40% of that journey by now. Let us say closer to INR 200 a ton, basically, and 175-200 area. Primarily, let us say power is one of the factors with the green power site, for example. Third is the logistics. These are my primary and of course, my raw material cost, which we have sustained with advantage in terms of the long-term agreement on suppliers, which we have to on a competitive bid basis with the group company and all.
I think raw material we have sustained, and from here onwards, I'm going to see improvement on raw material, continued improvement on the power and the efficiency of the power also, and also the Heat consumption while we sustain and improve on the coal cost. These are major factors, and apart from that, logistics cost. With every improvement and increase in my grinding capacity and location, therefore my overall lead distance comes down. We are also working on a few initiatives on EV and all, which will actually bring down the overall PTPK. These are broad numbers and therefore gives me much more high visibility to achieve. Even for the acquired assets, they will actually complement and help us to move on our INR 30 reduction. I'm quite bullish about that.
This quarter, for example, which we had to fix some of the issues on the revenue part done successfully, and which we will see a further improvement on that part with a more vibrant channel network and all. Cost anyway remains our forte and focus, so both will complement now to each other and hence my overall comfort to sustain and improve the EBITDA from here further is very high.
Understood, sir. Just an extension to this before I ask my second question. On a console basis, does your 530 target still is there? I ask because when you gave this target Orient was not in picture. Now Orient comes in and I believe there will be some CapEx involved to bring it to Ambuja's cost structure. Just want to understand on a consolidated basis, on an increased capacity, is it still 530 over FY 2024 base or the number has changed, the target has changed?
No, it continues. Even like for example, when we had given the numbers we had envisaged that there will be some acquisitions and all, therefore we will adhere to that number.
Understood. My second question is largely, sir, I think I have heard you.
I request you to come back for the follow-up question.
Absolutely.
Thank you. The next question is from the line of Pathanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.
Thank you for the opportunity. I have couple of doubts. I do not know if I may have missed it, but our other expenses on our presentation it mentioned 678 but there is a footnote that says excluding new assets and one time gain. Could you quantify or mention whether these are startup costs or something because of integration of the new assets? Or what is the difference? Will it continue or is it a one time expense?
You are referring to the other expenses which is 678 versus 699 of March and 699 of June. Is that the numbers you are referring to?
Yeah, because if I take it on a reported cost basis it is 788. But in the presentation it is mentioned as 678. So I think there is a delta of about INR 110 which is.
Yeah. Asset and the one time gain which was there in the previous year. We have actually put it aligned with the comparison and therefore comparison on Y o Y versus what we have done. If you see the footnote also which is there, it excludes the new assets and it also excludes the one time gain of the previous year.
Okay. It will not be recurring. Would that be the right understanding for this?
The gain was not recurring therefore it has been.
No, the new asset cost. The new asset cost, it won't be recurring?
That will not be recurring. You will see now a considerable improvement on these other expenses.
Okay. Sir, just one last question, sir. Between ACC and Ambuja, why do we see such a big difference in profitability? Given that this quarter South prices went up, ACC has better region presence in South and East, but ACC still reported very weak numbers compared to Ambuja.
Pathanjali, thank you, but not very weak. For example, let us say ACC has its own and from beginning if you know, the advantage Ambuja has is with respect to the captive coal mine while ACC is all third-party purchase. Fuel becomes an important factor. Then in terms of the power cost also because of again the vintage and legacy of ACC, the power cost also when I look at it broadly in case of ACC it is almost like INR 6.10 per unit compared to when I look at Ambuja it is say INR 5.30 and on overall basis it becomes say INR 5.90. Then some of the efficiency investment which are in process, but Ambuja has a higher WHRS factor almost 21% while in case of ACC the WHRS factor is say 14.14%.
There is a reason therefore I think for ACC our primary efforts are to work on the investment and the efficiencies gain on the cost and that will help us to bridge this gap of whatever INR 300, INR 400 a ton and come to four digits sooner for ACC as well. Of course, the brand equity, the brand pool is now started giving us very good results and more so the ACC Gold that is a blockbuster product in the industry in terms of the premium and therefore more and more focus on that will also help us to further improve the top- line and the realization which has happened in fact this quarter also.
But this certain which is like a time bridge, so investments are being done, they are in the plan. Therefore, this journey of cost improvement, when we said, it has actually a significant improvement of cost journey for ACC.
Sir, I see a lot of spends being done for ACC in terms of marketing.
Sir, sorry to interrupt, but I request you to come back for the follow-up question.
No, it's a continuation of the previous question, ma'am. So can I continue?
Nidhi, allow please. Yeah, Pathanjali .
Yes.
Yes, sir. Sir, we see a lot of brand spends, sir, that is being done for ACC, but the pricing gap between ACC and Ambuja is still pretty elevated. Are we positioning the two brands slightly differently in the market, or is there any other factor to it that I'm missing out on?
Both the brands have the strong brand equity, and both the strength of the brand equity is leveraged very prominently now. There is no per se promoting differently, but using their own advantages. In many pockets, ACC has a better price compared to Ambuja for the brand equity, and in many pockets Ambuja has, because they have their natural strengths. For example, East and South is where ACC has been very dominant from past, and North and West is where Ambuja has been very dominant from past. That continues. In fact, now with the synergy, the blend is actually helping us on an overall basis. Please look it on an overall basis. Of course, ACC with its brand equity strength, it is getting the prices benefit. Therefore, my overall consult and also standalone ACC, you will see a good improvement in the price per bag.
Sure, sir. Thank you so much.
Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah. Thank you, sir, for the chance. Most of the questions are answered. Sir, just one or two left. One, on the next phase of expansion, which is 21 MnT. What is our preparedness? If you can give some color as per, will it be largely greenfield now, given the brownfield phase is in the first phase? Also, what are the preferred locations?
Sumangal, good question again. The 21 million, which will actually from FY 2027, 2028, basically. Lots of groundwork has been done. Groundwork in terms of land, in terms of the overall approvals of CTOs, environmentals, public hearings, for example. Lots of this groundwork has been done. Therefore, it will not take more time when we actually start the project execution. Therefore, preparatory civil work, basic civil work, and pre-operating expenses and all. For example, in some of the sites have already started to happen, including appointment of the technical consultants and owners, engineers, and so on, so forth. Importantly, in terms of our negotiations with the vendors as well, which is already at a very advanced level, and we will share positive developments on that front also.
That 20 million tons is also well on track, and therefore, very confident to achieve 140 by end of March 2028.
And sir, some color on which regions will be the priority there. Any mix in the geographical mix are we looking at?
Primarily, I think we are like pan-India. But if you be more specific, then North you will see a good capacity. In Center also you will see couple of assets. Then East already we have commissioned, therefore, for example, East have already seen those additions. Couple of them in West. So you will see actually. So that will balance it out, because right now the Center we are at, say, on an overall basis, the 8% of my cement capacities, we will see more of this balancing happening across these five regions of the country. So it is not per se biased towards any particular.
Understood. Sir, for the Jaypee bid, what would be a strategy in case we went for the non-core assets?
Sorry, I could not follow, Sumangal.
Sir, we are keen to acquire Jaypee through the NCLT. What would be a strategy for the non-core assets which comes along with the cement assets there?
Sumangal, basically, as you know, Adani Enterprises Limited as a company has actually applied for that, and therefore, would not be fair from my side to comment. Hence, cement and non-cement as a complete pack, it's AEL which is actually have applied for it. I would refrain than anything further on that.
Okay. Thank you, sir, for the clarification, and all the best.
Thank you, Sumangal.
Thank you. The next question is from the line of Kunal Shah from DAM Capital. Please go ahead.
Yeah. Hi, sir. Just one question from my end. Just wanted to understand how is the brand integration process progressing in South, especially from Penna's plant? Any positive or negative surprise there? And specifically, how is Ambuja's brand positioning in the trade channel in South?
Very positive, Suman. Very positive. In fact, why Penna? In fact, now Orient also completely brand penetration has happened and migrated to Ambuja and ACC. So both, for example, Penna and Orient have done very well. Dealers have received it very well. All the dealers have also got onboarded into Ambuja and ACC platforms. So in terms of my overall volume improvement, for example, and when you see, obviously you can do an assessment because when I do the adjustment, 13% is there, and without the adjustment, almost say 20%. So this 7, 8% which has come from Orient also, Orient and Penna, is nothing but coming from this integration and penetration of this brand of Ambuja and ACC, and they have also helped us to improve with a better price realization. So I am very happy with this transition.
Just clarifying this one thing, like geographies of North and West, where Ambuja is specifically A or A+, is it the same positioning in South also where Ambuja is not present, like your AP, Telangana, Tamil Nadu? Just wanted that quick clarity.
No. I think from a positioning perspective, both Ambuja and ACC remain as A category brands pan India, including South.
Understood. This is very helpful, sir. Thanks a lot.
Thank you. Ladies and gentlemen, we will take this as the last question for today. I would now like to hand the conference over to Mr. Deepak Balwani. Over to you, sir.
Yeah, thank you. I trust that most of your questions have been addressed. Should you wish to discuss any outstanding query, we are available for a separate conversation from 5:20 P.M. to 5:45 P.M. today. You have my contact number. Please feel free to call me. Thank you.
Thank you, Nidhi. Thank you, everyone. On behalf of self and Rakesh, thank you all again.
Thank you.
Thank you very much. On behalf of Prabhudas Lilladher Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.