By Ks Badri Narayanan
Target: ₹620
CMP: ₹594.50
We visited Ambuja Cements’ (ACEM) Marwar Mundwa plant recently and attended the company’s capital market day held in Rajasthan.
Ambuja Cements or ACEM’s management highlighted its plan to simplify the cement business and merge it under a single company by amalgamating Penna Cement, Sanghi and Adani Cementation, which is expected to be completed by the end of CY25F. The merger of Ambuja Cements and ACC will be executed at an opportune time.
ACEM has given guidance of total cost savings of about ₹550/t, led by savings of ₹250-300/t from power & fuel via a combination of coal and green power (60 per cent by FY28F) and renewable energy or RE substitution. Also, ₹100/t via raw material sourcing and sea logistics (to rise from 5 per cent to 8 per cent) and ₹50–100/t via tech (EV fleet) as well as digital adoption. The TSR is expected to touch about 27 per cent by FY28F.
ACEM is entering a rebound phase, after a difficult FY25, with management confident of maintaining the 4Q rebound. ACEM’s renewed focus is on simplification, cost efficiency, tech adoption, and synergy-driven expansion under the Adani Group umbrella. ACEM is advancing well on its targets. Profitability is set to improve with the cost benefits continuing to flow in and improving the premium product mix.
Published on July 2, 2025