Orient Cement Q2 FY27 Earnings Call — Analysis (NSE: ORIENTCEM)

Ambuja Cements announced a ₹14,500 Cr capex program to add 30 MTPA grinding and 10.3 MTPA clinker capacity towards reaching 155 MTPA by FY30, while progressing the NCLT merger with ACC and Orient Cement.

3 Nov 2026 · Analysis by Alpha Inflection

Result quality: poor — Revenue declined. Management sentiment: neutral.

The take

Q2FY27 Revenue from Operations ₹9,197 Cr . New guidance — FY30 total consolidated cement capac… 149 million metric tons by FY29 and 155 million metric tons by FY30 . New story: Value over Volume and Trade Channel Focus .

Results

Consolidated revenue stood at ₹9,197 Cr with operating EBITDA of ₹1,271 Cr (13.8% margin, ₹770/t) and PAT of ₹236 Cr on sales volume of 16.5 MMT.

Financial highlights

Guidance

Management guided to achieve 149 MTPA capacity by FY29 and 155 MTPA by FY30, while targeting operating costs of ₹4,250/t in FY27 and ₹4,000/t in FY28.

What management committed to

• [Ambuja Cements] will reach 149 million metric tons of cement capacity by FY29 and 155 million metric tons by FY30. — 149 million metric tons by FY29 and 155 million metric tons by FY30, FY30
• [Ambuja Cements] requires closer to INR 14,500 crores for this 30 million tons expansion program, at approximately INR 7,500 crores per year. — INR 14,500 crores, FY29
• [Ambuja Cements] is on track to achieve its FY27 total operating cost target of INR 4,250 per metric ton. — INR 4,250 per metric ton, FY27
• [Ambuja Cements] targets consolidated operating cost of INR 4,000 per metric ton for FY28 across combined existing and new capacity. — INR 4,000 per metric ton, FY28
• [Ambuja Cements] expects completion of the proposed mergers of ACC and Orient Cement within this financial year [FY27], subject to NCLT approvals. — completion within FY27, FY27
• [Ambuja Cements] will commission 2.4 million tons capacity at Warisaliganj in Bihar in second half of FY27. — 2.4 million tons, H2FY27
• [Ambuja Cements] expects almost 400 electric vehicles to start operating for logistics by March of 2027. — almost 400 electric vehicles, Q4FY27
• [Ambuja Cements] expects exit capacity utilization of closer to 75% by end of FY27. — closer to say 75%, Q4FY27

Key themes

Capacity expansion and cost optimization road map

How the narrative shifted

• Value over Volume and Trade Channel Focus: Management is intentionally prioritizing high-margin trade sales, premium cement products, and blended cement mix while pruning unprofitable B2B institutional volumes.
• Aggressive Brownfield and Clinker-Backed Expansion: The company is deploying ₹14,500 Cr across 14 projects to expand grinding and clinker in high-EBITDA regional clusters, targeting 155 MTPA by FY30.
• Structural Cost Reduction and Group Synergies: Margin improvement is driven by higher green power adoption (61%), group captive fly ash tie-ups (20 MTPA), rail/BCFC logistics, and domestic coal substitution.
• Corporate Simplification via One Cement Platform: The consolidation of ACC and Orient Cement into Ambuja under NCLT is positioned to streamline operations, extract cost synergies, and be EPS-accretive.
• Macro Demand Resilience vs Regional Drought Headwinds: Management acknowledges geopolitical energy costs and monsoon/drought impacts in western and southern states, but expects structural infrastructure demand to sustain H2 recovery.

Operational commentary

• Announced 14 expansion projects adding ~30 MTPA cement grinding (15.2 MTPA West, 11.6 MTPA East, 2.9 MTPA North) and 10.3 MTPA clinker (Maratha 4 MTPA, Umrangso 4 MTPA, Mundra 2.25 MTPA).
• Proposed merger of ACC and Orient Cement into Ambuja Cement progressing to NCLT following shareholder approval, targeting closure within FY27.
• Commissioned 4.6 MTPA capacity in Q2FY27 across Dahej, Salai Banwa, and Kalamboli; 3.2 MTPA stabilized across Bathinda and Penna Jodhpur.
• Trade volume rose 8.6% YoY with trade share reaching 74% (+600 bps YoY), and premium products reached 37% of trade sales.
• Green power share reached 61% (inclusive of internal consumption and power sales), lowering net power cost to ₹4.8/unit from ₹6.0/unit in Q2FY26.
• Primary logistics lead reduced from 265 km to 254 km; deployment of 400 electric vehicles planned by March 2027.
• Secured long-term group supply tie-up for 20 MTPA fly ash from thermal power plants with expanded BCFC rail infrastructure.

Analyst Q&A

• Q. What is driving the initiation of a major capex expansion now given soft industry demand and negative H1 volume growth?

  Management stated the first wave of capex is complete and the next phase builds brownfield, value-accretive capacity in high-EBITDA markets (West, East, North) utilizing existing and upcoming surplus clinker with 14-18 month execution timelines.

• Q. How will the INR 14,500 Cr capex program be funded, and will debt rise by FY28/FY29?

  The capex program is planned to be completely self-sustainable through internal cash generation given strong balance sheet net worth of over INR 72,000 Cr, with any debt drawn only for interim funding needs.

• Q. What is the current utilization of acquired Penna and Sanghi assets?

  Sanghi and Penna are currently operating at approximately 50% capacity utilization, with substantial ramp-up and operational turnaround expected in Q3 and Q4 FY27.

• Q. Can management break down fuel cost and domestic vs imported fuel mix?

  Domestic coal accounts for over 60% of fuel mix while imported fuel is under 40% (with pet coke at 10-12%), helping insulate against Middle East geopolitical price shocks.

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