India’s two largest cement makers adopted contrasting operating strategies in the June quarter, with UltraTech Cement continuing to prioritise market share gains through strong volume growth, while Ambuja Cements focused on improving profitability by lowering costs and pruning lower-margin business, analysts said.
UltraTech outperformed on operating metrics, reporting 12-13% volume growth against industry growth of around 7-8%, helping it gain market share while maintaining healthy profitability despite rising fuel costs. The company also reported capacity utilisation of 81%, reflecting better asset utilisation than peers, experts added.
Ambuja, on the other hand, reported a decline in volumes after consciously reducing lower-margin non-trade sales, but offset part of the impact through lower operating costs. Analysts observed that the company’s structural cost reduction programme emerged as the key operational highlight of the quarter.
“The company’s strategy of prioritising profitable growth over volume is reducing near-term utilisation but should improve margins over time. Cost optimisation, integration of acquired assets, improving utilisation and execution of expansion remain key drivers,” analysts from Motilal Oswal said.
While Ambuja did not declare its capacity utilisation for the quarter, analysts estimate the utilisation for the quarter would have come in at between 63% to 65%, lower than 77% declared by Ambuja in fourth quarter of FY26.
Analysts attribute this to reduction in production volumes at the lower profitability units, mostly those from assets acquired over the past few years. “It is consciously reducing low-margin non-trade business in acquired assets,” analysts from Motilal Oswal said. Ambuja acquired Orient Cements, Penna Cement Industries and Sanghi Cement over the course of 2023 and 2024.
“The key difference seen between the two is also UltraTech’s ability to efficiently integrate the acquired assets, and bring them up to efficiency and profitability levels of the parent (UltraTech). Ambuja is still working on the same. Hence we have seen drop in volumes from the lower-profitability units,” an analyst from a leading brokerage explained.
Like competitor Ambuja, market leader UltraTech also went on a shopping spree and acquired assets like Kesoram and India Cements around the same time.
Brokerages said its performance demonstrated UltraTech’s ability to simultaneously expand volumes and preserve margins. “Management witnessed double-digit volume growth of ~12% in Q1 (versus industry growth of 7–8%), significantly ahead of industry growth, translating into continued market share gains. It continues to target double-digit volume growth in FY27,” analysts from JM Financial said.
They also highlighted management’s focus on expanding capacity to around 207 million tonnes by the end of FY27 while keeping net debt-to-Ebitda below one times.
On Ambuja’s performance, analysts said that Ebitda exceeded expectations because operating costs per tonne came in lower than anticipated. “The company targets incremental cost savings of Rs 130–150/t reinforcing confidence in achieving a cost base of Rs 4,250/t by end-FY27,” JM Financial analysts added. The company also expects the clinker inventory built during the quarter and higher coal inventory to provide a competitive advantage in the September quarter.