Ambuja Cements to slow capacity additions until utilisation improves

MUMBAI: Ambuja Cements will consider adding fresh capacities once it reaches optimal utilisation levels, said the Adani Group-owned company. The company however retained its target of boosting capacity to 119 million tonne by this fiscal year-end, from 109 million tonne last year.

“Capacity expansion is being pursued in a calibrated manner, our focus is consciously shifting towards stabilising newly commissioned capacities and improving utilisation across the existing base, with further capacity additions being pursued more gradually once optimal utilisation is achieved,” said Vinod Bahety, chief executive.

The company achieved around 70% utilisation level in FY26.


“More important than the capacity number is the capability it reflects: our ability to conceive, execute, commission and stabilise multiple projects with repeatable outcomes while operating a national manufacturing and distribution system at scale,” Bahety said in a letter to shareholders accompanying the company’s FY26 annual report.

The Adani Group forayed into the world’s second-largest cement market in 2022 through its twin acquisition of Ambuja Cements and ACC Ltd for more than $10 billion. At the time, the conglomerate had guided for doubling annual capacity to 140 million tonne by FY28.

Following a series of acquisitions since 2022 – including Sanghi Cement, Penna Cement Industries, and Orient Cement – and organic expansion, the company further raised its production target to 155 million tonne recently, before pruning its growth ambitions.

In FY26, Adani Cement’s consolidated revenue from operations and profit after tax scaled an all-time high, but earnings before interest, tax, depreciation and amortisation (EBITDA) fell from the year before. EBITDA margin also fell to 18% for the year from 23% in FY25. Cost of materials as well as power and fuel costs also saw a 100 basis points increase.

“Developments such as the West Asia conflict resulted in increases in oil and energy costs, coupled with immediate inflationary pressures,” said Bahety. “These factors resulted in sustained cost pressures, particularly in fuel, logistics and input costs which intensified towards the close of the year and are expected to continue in the near term.”

During the year, Ambuja Cements completed the amalgamation of Sanghi Industries and Penna Cement. It is currently in the process of amalgamating ACC and Orient Cement with itself. “Yet the deeper change underway goes beyond corporate consolidation,” said Bahety. “Structures are being flattened, cross-functional silos reduced, and decision-making moved closer to the market.”