Ambuja Cements' Q4 results: Net profit jumps 78.5% aided by one-offs

Ambuja Cements posts strong Q4 profit driven by tax credits, but rising fuel, freight and input costs, along with West Asia tensions, weigh on margins and outlook

Ambuja Cements’ consolidated net profit (attributable to the owners of the company) for the March quarter of 2025-26 (Q4 FY26) grew by 78.5 per cent year-on-year (Y-o-Y) to Rs 1,830.2 crore, thanks to tax credit of over Rs 1,300 crore. The company also said that the timeline for capacity expansion is being pushed back by a year or two to align with delivery and returns.

 

The Adani Group-owned cement producer’s Q4 FY26 reported profit after tax (PAT) was boosted by one-off tax-related adjustments, including a net deferred tax credit of Rs 604 crore and an income-tax provision reversal of Rs 761 crore. Adjusting for these and other exceptional items, normalised profit stood at Rs 569 crore against the reported PAT of Rs 1,857 crore.

 

 

On a normalised basis, the company’s PAT for Q4 FY26 declined 33.52 per cent Y-o-Y from Rs 856 crore in the year-ago quarter.

 

India’s second-largest cement producer also said that it reported the highest-ever quarterly volume at 19.9 million tonnes in Q4 FY26, an increase of 10 per cent Y-o-Y amid higher focus on trade sales and premium cement.

 

Higher volumes, along with an improved share of premium products in trade sales at 36 per cent, as against 35 per cent in Q4 FY25, aided Ambuja’s topline. Its revenue (from operations) in Q4 FY26 grew by 9.4 per cent Y-o-Y to Rs 10,915.5 crore.

 

Quarter-on-quarter, Ambuja’s Q4 revenue increased by 6.2 per cent, while its reported profit surged by 7.6 times.

 

The company topped the Bloomberg analyst poll’s profit estimate of Rs 723.3 crore, but missed the revenue estimate of Rs 11,329.1 crore.

 

Ambuja’s total expenses (including interest and depreciation) in Q4 FY26 also increased 19.31 per cent Y-o-Y to Rs 10,525.09 crore. Other expenses surged over 37 per cent Y-o-Y to Rs 1,780 crore, while depreciation and amortisation expenses jumped 51.72 per cent Y-o-Y to Rs 1,053 crore. A 14 per cent increase in power and fuel cost, and a 13.4 per cent rise in freight and forwarding expenses, also added to the pressure. Consequently, earnings before interest, taxes, depreciation, and amortisation (Ebitda) declined 21.62 per cent YoY to Rs 1,464 crore, and Ebitda margin was down 530 basis points Y-o-Y in Q4 to 13.4 per cent.

 

On the West Asia crisis, Ambuja noted that cost pressures from fuel, diesel, packaging bag supply constraints, and rupee depreciation impacted Q4 FY26, and the impact is expected to continue in the first half of FY27.

 

The company is mitigating cost pressures through fuel mix optimisation, higher renewable energy adoption, improved logistics efficiencies, prioritisation of higher-margin markets, and long-term raw material sourcing arrangements, Ambuja said.

 

“We have seen a bit of higher cost compared to our own expectations and therefore some disappointments. The primary reasons include higher freight costs due to an increase in the overall lead, both primary and secondary, and increases in some states, such as the additional goods tax, higher packing costs due to the West Asia war,” said Vinod Bahety, whole-time director and chief executive officer, Ambuja Cements, during the company’s earnings call on Monday.

 

There was also higher fuel cost on account of slightly higher-than-expected heat consumption, more so for the acquired assets, along with higher branding costs, he added.

 

The company is looking at Rs 500 per tonne of cost improvement over two years as its top priority. Its per tonne cost for Q4 FY26 stood at Rs 4,500.

 

For FY26, consolidated revenue stood at Rs 40,655.68 crore, up 19.61 per cent YoY, while its reported net profit (attributable to the owners of the company) stood at Rs 4,728.18 crore, up by 9.87 per cent Y-o-Y. Cement sales volumes stood at 73.7 million tonnes during the same period, up 16.06 per cent YoY.

 

Ambuja’s cement capacity as of FY26 stood at 109 million tonnes per annum (mtpa). It aims to achieve a capacity of 119 mtpa by FY27. Earlier, Ambuja had guided for 140 mtpa capacity by FY28. Bahety stated that the target plans for FY28 could move by a year or two.

 

Karan Adani, non-executive, non-independent director, Ambuja Cements, said, “Partially, there is a reset. We are not moving away from the target, but the timeline. That is to do with, we know that we are not delivering in terms of what we have, what we had committed. And so, it definitely makes sense to step back, to look back and to see where we are going wrong and to course correct.”

 

Ambuja spent Rs 7,500 crore in capex in FY26. It aims to spend Rs 6,000–6,500 crore in FY27. “Until we are able to deliver on what we are promising, it does not make sense to make more capital investments, because you do not generate the returns on that capital either,” Adani said.

 

Ambuja’s board has proposed a dividend of Rs 2 per equity share, 100 per cent of the face value of Rs 2 each, for FY26. Its shares listed on BSE closed at Rs 445.2 per equity share on Monday.

 

Ambuja Cements’ share price ended flat on Monday, closing at Rs 445.20 on the BSE. The results were announced during market hours.