Ambuja Cements vs Kansai Nerolac Paints 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..

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KA

Kansai Nerolac Paints

Q4 FY26 · Manufacturing

Kansai Nerolac reported a 7.6% standalone revenue growth in Q4 FY26, with PBDIT up 21% YoY, driven by improved product mix in decorative and double-digit auto demand. Decorative growth was mid-single digit, with a focus on premium products and new launches like Excel Sheen and XL Everlast. Industrial grew in higher single digits, with auto strong but other segments moderate. Management guided for 13-14% EBITDA margin, assuming raw material stability, and has taken cumulative price hikes of high single digits in decorative. Risks include prolonged West Asia crisis, crude volatility, and rupee depreciation. The company remains cautious on demand visibility due to inflation but sees green shoots from the past five months.

Guidance read

EBITDA margin target of 13-14% for FY27: Management reiterated its endeavor to maintain EBITDA margin in the 13-14% range, assuming raw material costs stabilize. Cumulative decorative price hikes of high single digits: Price increases of ~2% in March and 5-6% in April/May, totaling high single digits, to offset input cost inflation. Double-digit growth target for performance coatings: Management aims to grow the performance coatings segment in double digits, driven by infrastructure spending.

Risk read

Key risks include West Asia crisis and supply chain disruptions — Geopolitical tensions have caused crude price surges and supply chain issues, impacting raw material costs and availability.; Rupee depreciation increasing import costs — Sharp rupee depreciation has raised the cost of imported raw materials, pressuring margins.; Demand visibility remains uncertain due to inflation — Management described demand visibility as 'wait and watch' given the inflationary scenario, with potential impact on consumption.; New competition may intensify price wars — Analyst raised concern about aggressive pricing by new entrants; management noted freebies may have been withdrawn but advertising intensity remains high..

Promise ledger

Scorecard data is being built as historical quarters are processed.