Adani Cement eyes measured growth, defers ambitious FY28 targets

MUMBAI – Adani-owned Ambuja Cements, the country's second biggest manufacturer of the primary building material, pushed back its targeted new cement capacity additions and will instead focus on squeezing more out of its existing plants as it tempers down on capital spending, its senior management said Monday

“Maybe, the target plan of FY28, it could move a year or two. On a safer side I would say FY30,” said Vinod Bahety, the chief executive officer of the country’s second-largest producer of cement.

Cement offtake is typically linked to real GDP growth, and often runs at a function of about 1.2 times to the long period growth average. Companies typically begin stepping up capacities when utilization crosses the 80% threshold consistently.


The Adani Group had forayed in the Indian cement space in 2022 with the largest-ever acquisition in the materials space, bringing on board around 70 million tonnes of capacity after it purchased Ambuja Cements and ACC, the latter being the oldest manufacturer of the commodity in the subcontinent. It had earlier forecast doubling capacity to 140 million tonne by FY28, and late last year, raised this target to 155 million tonne.

“What matters is how you are able to ramp up volume from overall existing assets, and I have substantial headroom. Even if I hit 120 million tons by the end of 27, it will give me a good leverage of the overall market opportunity,” Bahety said. The company currently has a production capacity of 109 million tonne.

This downward revision by Adani Cement comes at a time when market leader UltraTech Cement recently announced crossing 200 million tonne of production capacity in the domestic market, with a guidance of achieving 240 million tonne of production capacity by fiscal 2028.

“Given the headwinds right now for the industry, it makes sense to push a little bit of the capex, but without losing eyesight on the overall market share and volume improvement from the existing assets and the ongoing expansions,” Bahety said.

Adani Cement spent Rs 7,500 crore on capital expenditure in fiscal 2026, and has guided for a spend of Rs 6,000 – 6,500 crore in the current fiscal. It sees capacity utilization at around 70 – 75% for the current fiscal.

“There are two-three things that we are looking at, one is we know the places we need to improve on,” Karan Adani, director of the company. “There are certain capacities which are in the wrong places, and so we will be adding few capacities in places which will help us in terms of reducing our costs as well as improve penetration into those markets,” he said. The company will also focus on increasing its clinker capacity, he said.

A key reason for this reset in strategy is to take cognizance of the company’s performance, Adani said. “We've not been able to deliver what we have promised to our shareholders. I think if we have to assess ourselves, we really need to improve on our cost,” he said.

“Until the time we are not able to deliver on what we are promising, I don't think it makes sense to make more capital investment because you don't get the returns on those capital invested as well,” he said.