Ambuja Cements Ltd (AMBUJACEM) Q2 FY27 Results Analysis: EBITDA Plunges 28%, RMC Lone Bright Spot

Ambuja Cements Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 9,166.00 Cr (+0.39% YoY) and PAT growth of -89.90% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q2 FY27 was defined by cost-side deterioration: operating EBITDA fell 27.75% YoY to Rs.1,276 Cr with margin compressing ~538 bps YoY to 13.87%, contradicting management's guidance that Q2 variable costs would be in line with or better than the June quarter. Cement segment margin collapsed from 10.40% to 4.00% while Ready Mix Concrete was the lone bright spot with 18.18% revenue growth and margin expansion. With H1 revenue down 3.79% YoY and volumes/cost-per-tonne undisclosed, the 8% FY27 volume growth target looks difficult, though the balance sheet remains net cash and the capex program is on track.

Key Investment Insights

Key Positives

• Ready Mix Concrete revenue grew 18.18% YoY to Rs.546 Cr with segment result up 65.6% YoY and margin expanding from 6.93% to 9.71%
• Company remains effectively debt-free with net cash of Rs.395 Cr; borrowings of Rs.55 Cr vs cash of Rs.395 Cr
• H1 consolidated CFO of Rs.2,896 Cr was 3.23× PAT; FCF essentially breakeven at −Rs.71 Cr with the Rs.6,500 Cr FY27 capex program 45.6% complete
• Standalone revenue grew 9.57% YoY to Rs.6,113 Cr
• ACC and Orient amalgamations approved by shareholders Sep 28-29, 2026, with NCLT hearing set for Nov 19, 2026
• ACC's Rs.492 Cr Karnataka royalty demand set aside by the Karnataka High Court on Sep 8, 2026, with Rs.125 Cr deposit refund directed
• ETR of 20.81% with no material deferred or one-off tax distortion this quarter

Risk Factors

• Operating EBITDA fell 27.75% YoY to Rs.1,276 Cr with margin compressing ~538 bps YoY to 13.87%
• Cement segment margin collapsed from 10.40% to 4.00% YoY as segment result fell 61.5% to Rs.350 Cr on flat revenue
• Power and fuel costs rose 11.9% YoY and other expenses 17.4% YoY against revenue growth of just 0.39%
• Normalized PAT to owners fell 9.3% YoY and 56.3% QoQ to Rs.260.3 Cr
• H1 FY27 consolidated revenue declined 3.79% YoY, putting the 8% FY27 volume growth target under pressure
• Standalone H1 CFO was negative Rs.(2,352) Cr on a Rs.(4,376) Cr working-capital swing, funded via intra-group ICDs
• CCI penalties of Rs.1,164 Cr (Ambuja) and Rs.1,148 Cr (ACC) remain pending before the Supreme Court with no provision recognised