Ambuja Cements vs Craftsman Automation Q4 FY26

AM

Ambuja Cements

Q4 FY26 · Manufacturing

Ambuja Cements reported a disappointing Q4 FY26 with cost per ton surging to ₹4,500, well above the earlier target of ₹4,100, driven by higher freight, packing costs from the West Asia crisis, and elevated repairs at acquired assets (Sanghi, Penna). Annual sales volume hit a record 73.7 million tons (+16% YoY), but EBITDA per ton at ₹887 missed expectations. Management admitted to execution failures, resetting capacity expansion timelines and guiding for only 8% volume growth in FY27 to ~80 million tons, below industry growth of 5-5.5%. Cost reduction of ₹250/ton is targeted for FY27, but Q1 is expected to remain flat at elevated levels. The key risk is that pricing power remains weak, with only ₹10/bag improvement, and cost inflation may persist if global energy prices stay high.

Guidance read

FY27 volume target of ~80 million tons: Management expects 8% volume growth to ~80 million tons in FY27, driven by stabilization of acquired assets and new capacities. Cost reduction of ₹250/ton in FY27: Targeting ₹250/ton reduction in average cost from Q4 FY26 exit of ₹4,500/ton, reaching ~₹4,250/ton for FY27. Capex of ₹6,000-6,500 crore for FY27: Capital expenditure for FY27 estimated at ₹6,000-6,500 crore, focused on completing ongoing projects and debottlenecking. Capacity to reach 119 million tons by end FY27: Cement capacity expected to increase to 119 million tons by end of FY27, including 10 million tons of new grinding units.

Risk read

Key risks include Cost inflation from West Asia crisis — Packing bag costs and fuel prices surged in March due to geopolitical tensions, adding ~₹250/ton to costs. Further escalation could delay cost reduction targets.; Weak pricing power amid soft demand — Despite cost inflation, cement prices have only increased by ₹10-15/bag in select pockets. Management expects subdued demand in April-May, limiting ability to pass on costs.; Execution delays in capacity expansion — Projects have been delayed due to contractor issues, incomplete engineering, and lack of team bandwidth. Management has reset timelines, but further slippages could impact volume growth.; Higher-than-expected costs at acquired assets — Sanghi and Penna plants have lower utilization (57% and 46% respectively) and higher maintenance costs. Turnaround has taken longer than anticipated, weighing on overall margins..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Craftsman Automation reported a mixed Q4 FY26. The powertrain segment saw margin improvement due to reduced repair maintenance and better product mix, but overall capacity utilization remains at 60-70%. The alloy wheel business exited March at an annualized run rate of 3 million wheels, with revenue of ~₹280 crore for FY26. The Sunbeam restructuring is ongoing, with management exiting unprofitable customers and products, expecting margin traction from Q2 FY27. Management guided for mid-teens revenue growth in FY27, driven by new projects across segments. The large engine powertrain business is on track to reach $100 million revenue by FY29-30. Key risks include inflationary manpower costs, inability to pass on commodity price increases, and potential import competition in alloy wheels.

Guidance read

Mid-teens revenue growth in FY27: Management expects double-digit revenue growth, specifically mid-teens, for FY27, assuming stable aluminium prices. Net debt to EBITDA below 2x in FY27: Management targets net debt to EBITDA to fall below 2x in the current fiscal year, and further to 1.5x. Sunbeam margin improvement from Q2 FY27: Restructuring of Sunbeam (exiting unprofitable customers/products) is expected to show margin traction from Q2 FY27. Large engine powertrain $100M revenue by FY29-30: The large engine powertrain business is on track to reach $100 million in revenue by FY29-30, with phase two expansion decision by September 2026.

Risk read

Key risks include Inflationary manpower costs — Management highlighted that labor cost inflation (20% YoY) is a major concern, difficult to pass on to customers, and could pressure margins.; Aluminium price pass-through and import competition — Analyst raised concerns about alloy wheel imports and commodity price pass-through; management acknowledged the risk and is cautious on further capacity expansion.; Sunbeam restructuring execution risk — Sunbeam's margin improvement depends on successful exit of unprofitable business and customer renegotiations; capacity utilization may temporarily drop to 45-50%.; High capex and debt levels — Despite management's confidence, net debt of ~₹3,300 crore and ongoing capex (land acquisition, new plants) could delay deleveraging if growth slows..

Promise ledger

Scorecard data is being built as historical quarters are processed.