Ambuja Cements , a key player in the Indian cement industry, has reported a robust performance for the second quarter, with significant growth in sales volume and profitability. The company has also unveiled ambitious expansion plans, aiming to reach a capacity of 155 million tonnes per annum (MTPA) by FY28.

Strong Q2 Performance

Ambuja Cements achieved its highest-ever quarterly sales volume of 16.6 million tons, marking a 20% year-on-year growth compared to the industry average of 4%. This impressive volume growth was accompanied by a 58% year-on-year increase in EBITDA, which reached INR 1,761.00 crores. The company's EBITDA per ton improved to INR 1,060.00, up 32% from the previous year.

Financial Highlights

• Revenue stood at INR 9,174.00 crores, up 21% year-on-year
• Market share increased by 1% to 16.6%
• Profit after tax reached INR 2,302.00 crores, up 364% (including a one-time tax write-back of INR 1,697.00 crores)
• Premium products comprised 35% of total trade sales, with 28% year-on-year growth in premium cement volumes

Cost Reduction and Efficiency Gains

Ambuja Cements reported significant cost reductions, with overall costs decreasing by INR 238.00 per metric ton year-on-year. The company achieved a kiln fuel cost of INR 1.65 per 1,000 kilocalories, which it claims is the lowest among peers. Management aims to further reduce total costs to INR 4,000.00 per metric ton by March 2026.

Expansion Plans and Debottlenecking

The company has revised its capacity target to 155 MTPA by FY28, up from the previous target of 140 MTPA. This increase includes:

• Expansion of existing capacities to 107 MTPA
• Addition of 15 MTPA through debottlenecking initiatives at 13 locations
• Plans to increase clinker capacity from the current 65 million tons to 96 million tons by FY28

The debottlenecking initiatives are expected to be completed at a lower capex of $48.00 per ton on an integrated basis.

Sustainability Initiatives

Ambuja Cements has made progress in its sustainability efforts:

• Green power share increased to 33% in Q2
• Renewable energy capacity reached 673 megawatts
• The company aims to achieve a 60% green power share by FY28

Future Outlook

Vinod Bahety, CEO of Ambuja Cements, expressed optimism about the company's future, stating, "I'm quite bullish to achieve double-digit growth may not be 20% when the acquired assets mature and therefore, the base goes up. But surely double-digit growth is what we are targeting on strength of the strong brands what we have with top of it, now the Adani brand also getting shipped into it."

The company expects to benefit from improved economic sentiments and higher investments in both public and private sectors. It also anticipates that the recent GST reduction from 28% to 18% for cement will drive demand, especially for premium products.

As Ambuja Cements continues to integrate its acquired assets and implement efficiency measures, it aims to sustain and improve its EBITDA performance, targeting INR 1,500.00 per ton by FY28.

With its ambitious expansion plans and focus on operational efficiency, Ambuja Cements appears well-positioned to capitalize on the growing demand in the Indian cement market and strengthen its competitive position in the coming years.

Sanghi Industries Limited , a prominent player in the Indian cement sector, has reported its financial results for the second quarter ended September 30. The company's performance shows a mixed picture, with significant revenue growth accompanied by a continued net loss.

Financial Highlights

Sanghi Industries reported a substantial 88% year-on-year increase in revenue from operations, reaching Rs 284.93 crore in Q2, up from Rs 151.50 crore in the same quarter last year. This growth is particularly noteworthy given the challenging market conditions.

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a significant improvement, rising to Rs 24.90 crore from Rs 3.10 crore in the previous year, marking a 703% increase. This indicates enhanced operational efficiency despite ongoing challenges.

However, Sanghi Industries continued to face headwinds, reporting a net loss of Rs 116.55 crore for the quarter. While this represents a 40% reduction from the loss of Rs 195.68 crore in Q2 of the previous fiscal year, it underscores the persistent challenges in the sector.

Operational Performance

The company's cement capacity utilization remained steady at 36%, unchanged from the previous quarter. Cement sales volume stood at 0.6 million tonnes, reflecting the impact of adverse weather conditions on operations.

Sanghi Industries attributed the low capacity utilization to heavy monsoon conditions and flood-like situations during the quarter. Despite these challenges, the management expressed optimism, projecting a capacity utilization of 70-75% for the remaining part of the fiscal year.

Strategic Initiatives and Future Outlook

During Q2, Sanghi Industries undertook strategic maintenance activities:

1. Scheduled maintenance of kiln line II
2. Rehabilitation of a 15km thermal power plant transmission line

These initiatives are expected to enhance operational efficiency in the coming quarters.

The company's Board of Directors has approved a merger scheme with Ambuja Cements Limited, with a shareholder meeting scheduled for November 20. This potential merger could significantly alter Sanghi Industries' market position and operational capabilities.

Legal and Financial Developments

Sanghi Industries is currently engaged in ongoing litigation with Gujarat's Chief Commissioner of State Tax regarding electricity duty exemption. In a positive development, the company received Rs 40 crore as an indemnification claim from erstwhile promoters related to this dispute.

Conclusion

While Sanghi Industries continues to navigate challenging market conditions, the significant growth in revenue and EBITDA suggests improving operational metrics. The company's strategic maintenance activities and potential merger with Ambuja Cements indicate a focus on long-term growth and efficiency. Investors and market watchers will be keenly observing how these initiatives translate into financial performance in the coming quarters.