Adani Cements, the holding company of Adani Group’s cement firms, expects sales from its two cement firms — ACC and Ambuja Cements — to more than double to Rs 85,000 crore and Ebitda per tonne to rise to about Rs 1,500 crore by FY27.
The two firms are also on track to expand production capacity to 140 million tonne per annum (MTPA) by FY28.
“The robust cement demand recorded in the past two fiscals is expected to continue. The plans to expand production capacities are in line with an expected rise in cement demand over the next four years, led mainly by the infrastructure and housing sectors, even though it would see some dip in this year due to elections and geo-political issues,” a source close to the development said.
As of December 2023, Adani Cements’ sales stood at Rs 42,100 crore, while Ebitda per tonne was at Rs 1,250 crore. Ebitda is also expected to rise as the firm would source power, coal and logistics support from the group firms.
“A higher share of coal from captive mines, linkage coal and opportunity to buy imported coal will continue to improve on fuel costs. Further, logistics — both sea and rail — handled in-house would help in reducing logistics costs,” the source added.
In calendar year 2023, the company added 9.9 MTPA or 15% capacity, including the 6.1 MTPA that came in through the acquisition of Sanghi Industries. In December 2023, Ambuja Cements completed the acquisition of Sanghi Industries and later in January its subsidiary ACC closed the acquisition of the balance 55% stake in Asian Concretes and Cements (2.8 MTPA).
Following these acquisitions, Adani Group’s production capacity rose 15% to 77.4 MTPA from the year ago-period.
The firm has 8 MTPA of clinkering projects and 14 MTPA of cement projects under various stages of implementation. In addition, pre-project activities have been initiated at five locations with an incremental 12 MPTA cement capacity.
The firm is expecting 10-15% capacity addition every year through the organic route, while it is also scouting for inorganic opportunities.