Ambuja Cements vs Shree Cement 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

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

SH

Shree Cement

Q4 FY26 · Manufacturing

Shree Cement delivered a strong Q4 FY26 with domestic cement sales volume up 11% YoY to 10.56 million tons, driven by a strategic shift to volume growth after narrowing the price gap with the top player by 15-20 rupees per bag. EBITDA rose 34% YoY to ₹1,212 crore, with EBITDA per ton improving to ₹1,125. Capacity utilization jumped to 66% from 56% in Q3. The company commissioned a 3.65 MTPA clinker and 3.5 MTPA cement plant in Karnataka, raising total capacity to 69.3 MTPA. Management guided for ~40 million tons cement volume in FY27 and capex of ₹1,500 crore. Key risks include Middle East conflict driving fuel cost inflation (expected ₹150-200/ton cost increase in Q1) and potential demand disruption from geopolitical tensions.

Guidance read

FY27 cement volume target of ~40 million tons: Management expects to achieve around 40 million tons of cement sales in FY27, implying ~10% growth over FY26. Capex guidance of ₹1,500 crore for FY27: Capital expenditure for FY27 is estimated at approximately ₹1,500 crore, primarily for RMC plants, railway sidings, and Meghalaya expansion. RMC plant count to reach 50-55 by FY27 end: The company plans to increase its RMC plant count from 26 to 50-55 by the end of FY27. UAE cement mill commissioning by September 2026: The 2.5 million ton cement mill at Union Cement UAE is scheduled to be commissioned by September 2026.

Risk read

Key risks include Fuel cost inflation from Middle East conflict — Geopolitical tensions have increased fuel costs; management expects a 10-12% rise in per kilo calorie cost in Q1 FY27, with potential further increases.; Packaging cost increase — Packaging costs have risen by ₹20/ton in Q4 and are expected to increase by another ₹80-100/ton in Q1 FY27 due to higher paper prices.; Demand slowdown from geopolitical tensions — The Middle East conflict has slowed sales in UAE, and management noted potential headwinds for the sector from geopolitical issues and monsoon conditions.; Meghalaya expansion incentives uncertain — Management has not yet received confirmed incentives from the Meghalaya government for the new plant, though the project is viable without them..

Promise ledger

Scorecard data is being built as historical quarters are processed.