Synopsis:
Ambuja Cements and Shree Cement both reported strong Q2FY26 growth, with Ambuja leading in scale and profitability, while Shree showed robust volume and EPS gains; Ambuja focused on capacity expansion and renewables, Shree on stable pricing and regional efficiency.
India’s cement demand is set to grow 7–8% in FY26, driven by government housing schemes, infrastructure projects, and rising construction activity. Cement production rose 6.3% in FY25 to 453 MT, with 150–160 MT capacity planned by FY28. The GST revamp may lower prices by Rs. 30–35 per bag, further boosting demand.
India’s top cement firms, among the world’s greenest, plan to add 42 MT capacity in FY25 and invest Rs. 1.25 lakh crore by FY27 to expand grinding capacity by 20%. Government infrastructure projects, like the Mumbai-Ahmedabad Bullet Train, will further boost long-term demand.
Operational Highlights
Ambuja Cements has raised its FY28 production target from 140 MTPA to 155 MTPA by debottlenecking existing plants at a low cost of $48 per ton. To boost quality and profitability, 13 new blenders will be installed over the next year to increase the share of premium cement. Upgrades to plant logistics will improve utilization of the current 107 MTPA capacity by 3% over two years.
Trial production has started for a 4 MTPA kiln line at Bhatapara, while a 2 MTPA unit at Krishnapatnam is operational, with 7 MTPA more coming online across three locations in Q3. On the sustainability front, 200 MW of solar power has been commissioned, taking total renewable capacity to 673 MW, aiming for 900 MW by year-end and 1,122 MW by FY27.
Meanwhile, Shree Cement volumes in Q2 FY26, the company sold a total of 7.9 million tons, slightly higher than 7.6 million tons a year ago. Cement-only sales grew 6.8% year-on-year, while cement plus clinker sales grew a bit slower, around 4.5–5%. Compared to the previous quarter, volumes were down about 12%, mainly due to heavy monsoon rains in northern regions.
Overall, prices remained stable from Q1 to Q2, and were up about 9% compared to the same quarter last year. However, with GST adjustments and softer demand in October, prices across India have slipped slightly below Q2 levels. Management expects that if demand picks up a little, prices should at least stay stable. The North and West regions are likely to perform slightly better than the rest of the country in the coming quarters.
Trade sales made up 70% of total sales (slightly lower than 71% in Q1), and blended cement accounted for 68% of sales (down from 70% in Q1). The average delivery distance for cement was 441 km, slightly lower than 451 km previously. Fuel costs increased a bit, with energy cost per ton at 1.66 Kcal compared to 1.59 Kcal in Q1, and petcoke made up 66% of the fuel mix. Management expects fuel costs to remain similar or slightly lower in the near term.
The company is expanding its UAE operations with a new 3 mt grinding mill to convert surplus clinker into cement, targeting a strong domestic market across Dubai and Ras Al Khaimah, along with kiln debottlenecking to add ~0.5 mt capacity. The project, with a capex of ~AED 110 million, is fully funded from UAE cash reserves.
Its product mix includes oil-well and slag cement, exported regionally and to select European and North American markets. Consolidated financials now show a wider EPS differential of INR 33 versus INR 6–7 historically, highlighting the UAE business impact, and management recommends using consolidated figures for valuation.
Financials
Ambuja Cements has reported strong year-on-year growth for Q2FY26. Its sales rose 21% to Rs. 9,174 crore compared with Rs. 7,552 crore in Q2FY25 while quarter-on-quarter, sales dipped slightly from Rs. 10,289 crore in Q1FY26 EBITDA surged 58% year-on-year to Rs. 1,761 crore, up from Rs. 1,111 crore reflecting improved operational efficiency.
The company’s net profit saw a remarkable increase of 364% to Rs. 2,302 crore compared with Rs. 496 crore a year ago and Rs. 1,017 crore in Q1FY26. EPS of Rs. 7.14, up 266% from Rs. 1.95 in Q2FY25 and Rs. 3.39 in Q1FY26, underscoring strong profitability growth.
Meanwhile, Shree Cement has delivered robust year-on-year growth for Q2FY26. Its sales increased 17% to Rs. 4,761 crore from Rs. 4,054 crore in Q2FY25, though slightly lower than Rs. 5,281 crore in Q1FY26. EBITDA jumped 59% year-on-year to Rs. 974 crore up from Rs. 613 crore reflecting strong operational performance.
Net profit surged 304% to Rs. 310 crore, compared with Rs. 76.6 crore in Q2FY25, while EPS rose 304% to Rs. 85.51 from Rs. 21.19, though lower than Rs. 178.12 in Q1FY26. EPS grew by 304% from Rs. 178.12 in Q1FY26 and Rs. 21.19 in Q2FY25 to Rs. 85.51 in Q2FY26.
Price Movement
With market capitalization of Rs. 1,35,332 cr, the shares of Ambuja Cements Ltd are closed at Rs. 547.50 per share, from its previous close of Rs. 555.75 per share. The stock has delivered 13% return over the past year, a 2% return year-to-date, and a negative return of 3% in the past month.
Meanwhile the shares of Shree Cement Ltd with a market capitalization of Rs. 95,527 cr are closed at Rs. 26,475.95 per share, from its previous close of Rs. 26,474.70 per share. The stock has generated a 10% return over the past year, recorded a year-to-date of 4%, and achieved a 8.5% decline in the last month.
Shareholding Pattern
In Ambuja Cements, Promoters hold 67.68% in Q2FY26 from 67.57% in Q1FY26. FII’s decreased their stake from 7.43% to 5.91%. DII’s raised their stake to 19.41% from 18.49%. Government holding stands at 0.21%. Public holding also increased from 6.30% to 6.77% over the same period.
Meanwhile, Shree Cement the promoter holding stands flat at 62.56%. FII’s slightly increased their holding from 10.07% in Q1FY26 to 10.34% in Q2FY26. DII’s decreased to 14.40% from 14.65%. Government holding stands at 0.25%. Public holding declined from 12.48% to 12.46% over the same period.
Written by Manideep Appana
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