ACC Q2 FY27 Earnings Call: Reaffirms 149 MTPA Capacity By FY29, Guides High Single-Digit H2 Volume Growth

ACC held its Q2 FY27 earnings call on October 27, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Trade-Led Quarter in a Lean Monsoon Season

• Revenue of Rs.9,197 cr with operating EBITDA of Rs.1,271 cr (~14% margin, Rs.770/MT) — Q2 FY 2026-2027 delivered PAT of Rs.236 cr; the company remains debt-free with AAA (long-term) / A1+ (short-term) ratings, net worth of Rs.72,238 cr and cash of Rs.1,070 cr.
• Trade volumes grew +8.6% YoY while B2B stayed negative — overall volumes were flattish; trade share rose 6% to 74%, and premium products reached 37% of trade sales vs 35% in Q2 FY 2025-2026.
• Blended cement share rose from 77% to 82% YoY — price sustained at Rs.255/bag in a lean monsoon quarter, with Rs.10/bag already realized month-to-date in October (Q3 FY 2026-2027).
• Total cost was Rs.4,410/MT (~Rs.4,182/MT normalized excluding geopolitical-conflict impact) — management reiterated it is on track for the FY 2026-2027 cost target of Rs.4,250/MT.
• Net power cost fell to Rs.4.8/unit (vs Rs.6/unit in Q2 FY 2025-2026) — though up from Rs.4.3/unit in Q1 FY 2026-2027; fuel cost was Rs.1.87/thousand kcal (vs Rs.1.60 in Q2 FY 2025-2026) on higher domestic coal share; primary lead cut from 265 km to 254 km and working capital cycle improved by 10 days.
• Low Q2 tax rate attributed to merger-related tax shields — CEO Vinod Bahety said shields from Penna and Sanghi flowed through as part of the merger, which he reiterated is EPS accretive.
• Blended realization growth over H1 FY 2026-2027 vs the Q4 FY 2025-2026 average was flagged (by Avendus Spark's Gaurav Nagori) as the lowest among peers despite a higher trade mix — management said the trade "journey has started" and benefits will be value-accretive each quarter.

30 MTPA Program Locked In; Execution Track Record Questioned

• Management reaffirmed 149 MTPA by FY29 and 155 MTPA by FY30 — up from ~113.5 MTPA currently, unchanged from prior guidance of 140 MT by FY28 plus 15 MT from debottlenecking by FY30; capex of ~Rs.14,500 crore for the 30 MTPA expansion runs at ~Rs.7,500 crore per year.
• 4.6 mn MT commissioned in Q2 FY 2026-2027 — across Dahej (Gujarat), Salai Banwa (UP) and Kalamboli (Maharashtra); 3.2 mn MT across Bathinda and Jodhpur stabilized with ramp-up expected in H2 FY 2026-2027; 2.4 mn MT at Vartaliganj (Bihar) to be commissioned in H2 FY 2026-2027.
• 14 projects add ~30 mn MT cement and 10.3 mn MT clinker — grinding of 15.2 mn MT in the west cluster, 11.6 mn MT in the east cluster and 2.9 mn MT in the north (Dadri Line 2, UP); clinker of 4 MTPA at Maratha, 4 MTPA at Umrangso (Assam) and 2.25 MTPA at Mundra (completion timeline unspecified).
• Kotak Securities' Siddharth Mehrotra flagged a thin execution record — ~100 MTPA combined organic (~70 MTPA) + inorganic (~30 MTPA) against 113 MTPA total capacity as of Q2 FY 2026-2027, implying only ~10-15 MTPA added over the past 3 years, plus ~20 MTPA bunched between March and May 2028 under the revised plan.
• Management guided ~14-month timelines for grinding units and ~18 months for integrated units (period unspecified), citing a "much more robust" execution plan; contractor-related challenges have "now all overcome," with more details to be shared in coming quarters of FY 2026-2027.
• Four debottlenecking projects with Loshe are on track for completion within 4-5 months (~Q4 FY 2026-2027) — Maratha line 2 is in advanced stages and expected up and running within Q3–Q4 FY 2026-2027.
• FY 2026-2027 capex program of Rs.6,500-7,000 crore — ~Rs.3,000+ crore already spent in H1 FY 2026-2027 with Rs.3,000-3,500 crore slated for H2; FY 2027-2028 and FY 2028-2029 capex guided at ~Rs.7,000-7,500 crore (CEO ballparked Rs.7,500 crore for the next two years).

H2 Acceleration Guided, But Drought Clouds the Backdrop

• Management guided H2 FY 2026-2027 company volume growth at high single digit, if not double digit — ahead of industry, with efforts aimed at moving above double digit; both trade and B2B volumes are expected to turn positive in Q3 and Q4 FY 2026-2027, with a commitment to no loss of YoY growth from here onwards.
• Q2 FY 2026-2027 capacity utilization was ~61-62% — management expects exit capacity utilization closer to ~75% by FY27, noting weighted average capacity should factor in commissioning timing as ramp-up occurs gradually.
• Management's Q2 FY 2026-2027 presentation maintains ~6-7% industry demand expectation for full FY 2026-2027 — versus the ~8% H1 FY27 industry growth cited by the analyst in Q&A management had earlier pegged industry growth at ~5% for FY 2026-2027.
• Drought has been declared in Maharashtra, Karnataka, Andhra Pradesh and Rajasthan — states that are large markets for the company; the CEO expects repercussions with some lag at least through Q3-Q4 FY 2026-2027, though the company has not faced the problem so far.
• October trade volumes came in ahead of management expectations — management would "up its bets" on a higher degree of trade growth in Q3-Q4 FY 2026-2027; ready-mix concrete volumes grew +19% YoY to 1.07 mn cubic meters across ~125 plants.
• Penna and Sanghi are operating at ~50% utilization — management expects improved utilization of these assets in Q3 and Q4 FY 2026-2027 but declined to disclose H1 FY 2026-2027 utilization until after a complete revamp in Q3-Q4 FY 2026-2027.

Rs.4,250/MT FY27 Target Defended Amid Fuel Inflation

• Cost/tonne path of Rs.4,410 in Q2 FY 2026-2027 to ~Rs.4,150 by Q4 FY 2026-2027 — toward a full-year FY 2026-2027 level of ~Rs.4,100+; the ~Rs.160/ton H2 FY27 improvement is already factored in despite an inflationary environment, and the Rs.4,250/ton FY 2026-2027 target holds subject to no further global escalation.
• Fuel costs are expected to rise at least Rs.100/ton from Q2 to Q4 FY 2026-2027 — current spot imported fuel cost is Rs.2.80-2.85 per 1,000 kcal vs Q2 blended fuel cost of Rs.1.87 (spot ~Rs.2.2 at the time); management expects to outperform peers on fuel via a growing domestic-fuel advantage (imported fuel <40% of mix, domestic >60%).
• Q3 FY 2026-2027 cost levers include 18 MW of WHRS coming up at Sanghi — plus higher green power consumption, BCFD infrastructure additions and AFRs under a defined cost-optimization plan.
• Management has tied up 20 million tons of fly ash with group thermal power plants — at competitive pricing on a landed-cost basis (as of Q2 FY 2026-2027) under a long-term agreement; the BCFP initiative is implemented and will expand over Q3–Q4 FY 2026-2027.
• Logistics lead distance declined QoQ and is expected to fall further in Q3 and Q4 FY 2026-2027 — supported by ~400 electric vehicles expected to be operating by March 2027 (FY 2026-2027), a Government of India BCFC incentive scheme with complete mapping of logistics savings, and DigiPin mapping pan-India with a revamped ACC-Ambuja master database.
• Manufacturing and logistics SLAs are progressing "better than even what we anticipated" — all new grinding units are on SLA with vendor partners and 5 plants have moved onto logistics SLA; management confirmed SLA benefits are "all baked in" to the Q2 FY 2026-2027 cost guidance.
• 2-3 million tons of capacity could be mothballed over time (period unspecified) — with detailed engineering studies still underway to identify cost reductions at currently non-operating plants.

Blended Focus, NCLT Path for Merger, Rs.150 Cr Ancillary Revenue

• EBITDA-per-ton gap vs the first and third largest players remains ~15-20% — as flagged by CLSA's Indrajit Agarwal; CEO Vinod Bahety reframed around blended cement share (~80%, closer to 82%) and a targeted sustained 80-20 blended-to-OPC sales ratio (period unspecified), citing fly ash availability as a structural advantage.
• ACC / Orient Cement merger will now proceed to NCLT for final approvals — completion expected within FY 2026-2027, subject to requisite regulatory, statutory and NCLT approvals; expected to be EPS-accretive and support the "One Cement" platform.
• Consolidated clinker capacity stands at 69 million tons — with a clinker-to-cement ratio of approximately 66% in H1 FY27 (FY 2026-2027); Axis Capital's Amit Murarka noted FY26 clinker utilization of ~75% vs cement utilization of ~67%, questioning the ~3x grinding-to-clinker capacity addition (period unspecified); management said surplus grinding capacity is "good for us" as flexibility.
• Fly ash (~Rs.25 cr) plus RE power (~Rs.136 cr) revenue totaled ~Rs.150 crore in Q2 FY 2026-2027 — with combined EBITDA contribution pegged at ~Rs.97/tonne; ~352 million units of green power were sold, recorded under other operating income rather than netted off power cost.
• RMC EBITDA margin confirmed at ~7% for Q2 FY 2026-2027 — management expects the pace of RMC growth to accelerate in coming quarters (period unspecified).
• Trade-led value capture is estimated at ~Rs.40/tonne currently (H1 FY 2026-2027) — building by ~Rs.40/tonne in each of the next 2-3 quarters (Q3 FY 2026-2027 through Q1 FY 2027-2028), reaching almost Rs.150/tonne of benefit from trade by June (Q1 FY 2027-2028).
• Announced projects are "mostly yes" eligible for state-level fiscal incentives — with a higher degree of incentives for Northeast and UP; existing projects being commissioned will also be incentive accretive in coming quarters of FY 2026-2027.

Cost Roadmap to FY28, With Execution and Macro Caveats

• Cost guidance of Rs.4,000 per metric ton across the entire combined capacity at 149 MTPA by FY28 (FY 2027-2028) — the speaker initially cited FY30/155 MTPA before correcting the guidance to FY28/149 MTPA; profitability improvement is anchored on cost optimization rather than price.
• Management cited investments in WHRS, AFR and BCFC to bridge the timing mismatch vs more mature peers — which management said would leave it with a "huge potential positive" compared to others.
• Renewable power consumption share is expected to increase in H2 FY 2026-2027 — supporting lower power costs; note the Q2 presentation's 61% green power share reflects a company-level net basis (consumption plus sales) vs the prior consumption-only basis, i.e. a reporting-basis change rather than a like-for-like jump.
• Value-focused B2B recalibration continues — negative-EBITDA institutional volumes were sacrificed; as costs decline, institutional sales are becoming viable, with trade preference underpinned by the Ambuja and ACC brands.
• Near-term conditions remain challenging — geopolitical conflicts, global uncertainty, higher energy costs and weaker monsoon, while structural demand is supported by infrastructure spending, urbanization, rural housing and industrial activity; governments are promoting blended and green cement, with projects qualifying under government policies.
• On supply chain, management declined to name specific suppliers (including on Chinese supply for Assam) — saying the execution plan has been reinforced and all partners are willing to work in line with the company's defined timelines; both Sanghi kilns are up and running with a "very substantial improvement" expected in Sanghi utilization and cost efficiencies, and the same outlook reiterated for Penna.