The Company’s financial capital is the foundation for its business to grow and thrive. It uses the financial capital inputs to generate returns, create value for stakeholders, and enhance growth through investments in other capitals. The Company’s core business activities and financing endeavour align with market conditions and bolster operational efficiency to deliver robust returns and foster business excellence. The Company is debt-free and has best-inclass working capital of 19 days with sufficient cash and cash equivalent.
UN SDGs Impacted
Stakeholders Impacted
Investors and Shareholders
Employees
Channel Partners
Suppliers
Community and NGOs
Material Topics
- Economic Performance
- Procurement Practices
- Climate and Energy
- Indirect Economic Impacts
Focus Areas
Developments and Key Initiatives |
Key Performance Indicators |
|
|---|---|---|
Growth |
Reported strong revenue growth |
` 33,160 crore
Revenue from operations |
Margin Management and Efficiency |
Cost optimisation achieved through focused initiatives for energy, logistics and others Enhanced share of premium products |
19.3 %
Operating EBITDA |
Financial
|
Strong capital profile with robust cash and bank balance Healthy asset base Net worth at all-time high Zero debt |
` 24,338 crore
Cash and cash equivalents (including warrant money of ` 8,339 crore received in April 2024) ` 65,298 crore
Total assets ` 59,185 crore
Net worth (including warrant money of ` 8,339 crore received in April 2024) |
Shareholder
|
Shareholder value creation through dividend issue |
` 2
Proposed dividend per share in FY 2024 ` 496 crore
Dividend payout during the year 21.1 %
Dividend payout ratio |
Overview
Symbolising resilience, Ambuja Cements has exhibited robust financial performance driven by market expansion, operational excellence, cost efficiency, and strategic business synergies. The Company’s focused market expansion initiatives and effective consumer connect efforts helped it achieve robust volume growth during the year under review.
The Company is focused on cost optimisation, leveraging synergies from Group businesses, and implementing business excellence initiatives to reduce operating costs, clinker factor, and logistics costs, improve blended cement sales, optimise energy mix, and expand EBITDA margin. Additionally, efforts to enhance working capital and increase treasury income have shown positive results.
Growth Trajectory
During FY 2023-24, Ambuja Cements' revenue from operation soared to ` 33,160 crore. This achievement was propelled by consistent demand in its target markets, boosting its capacity utilisation to 81%. The Company continues to focus on the premium category to attain increased average realisations.
Revenue from Operations
(` crore)
Cement Sales Volume
(MMT)
Promising Capacity Expansion Benefit in Godda, Jharkhand
Ambuja Cements plans to establish a 4.0 MTPA cement grinding unit in Godda, Jharkhand, with a ` 1,000 crore investment. Situated close to Adani Power (Jharkhand) Limited, it aims to dispose of fly ash responsibly and foster inclusive growth. This project is expected to generate over 2,500 jobs, contributing significantly to the state's economy and social progress. With existing operations comprising two cement plants in Jharkhand, Ambuja Cements demonstrates confidence in the region's potential for development.
Margins and Efficiency
Ambuja Cements continuously focuses on cost rationalisation, enabling it to achieve an operating EBITDA of ` 6,400 crore. The operating EBITDA margin for the reporting period stood at 19.3%. In navigating an inflationary environment, the Company successfully curbed the growth in total operating costs. It accomplished this through increased energy utilisation from waste heat recovery systems, substituting imported coal with domestic coal, and implementing various logistics improvement and cost optimisation initiatives. It plans to improve EBITDA margin to 35% by FY 2027-28.
Cost Break-up Percentage of Total Cost
Growing Asset Base
(` crore)
Earnings
The Company’s pre-tax profit reached ` 5,901 crore, showcasing a pre-tax profit margin of 17.8%. The year's net profit amounted to ` 4,738 crore, with a net profit margin of 14.3%.
Assets
Ambuja Cements' total assets amounted to ` 65,298 crore, with current assets representing 38% of the total assets during the review period.
The Company’s funding profile improved in the reporting year, supported by robust profit generation that enhanced its net worth. The Company continues to remain debt-free in the long term.
Cash Flow
The Company’s cash flow positioning improved over the years due to heightened activity levels and efficient working capital management, driven by a widespread enhancement in operational performance that increased its operating cash flow.
Credit Rating
CRISIL Ratings has reaffirmed the highest category Long Term Credit Rating of AAA/Stable and Short Term Credit Rating of A1+ for the bank loan facilities. This indicates Company’s sound financial health, ability to meet the financial obligations and a robust risk profile.
CRISIL AAA/ Stable/CRISIL A1+
Ratings affirmed on the bank facilities and short-term debt programme
Growing Asset Base
(` crore)
*January-December 2021
#January 2022-March 2023
Capacity Expansion Projects
As the Company strives to achieve its ambitious target of 140 MTPA capacity by FY 2027- 28, it is focusing on innovation to maintain cost leadership and utilising operating cash inflows to maintain a strong balance sheet. The Company remains dedicated to its path of prudent capital allocation with financial discipline in expanding cement capacity and clean energy initiatives to achieve sustainable growth for our stakeholders, utilising operational cash flows and internal accruals to fund the growth endeavours.
Ambuja Cements has developed a robust capability of adding new projects of clinkerisation and cement. In addition to the ongoing 20 MTPA expansion projects, the Board has also approved a 2.25 MTPA Clinker Unit in Mundra (Calcium Hydroxide process), and 17 Cement Grinding Units (2.4 MTPA each). Land acquisitions, and statutory approvals for these projects are under progress. After the successful completion of these projects, the cumulative cement capacity shall increase to 140 MTPA.
Investor Relations
The Company’s focused Investor Relations function ensures keeping its stakeholders informed proactively about the significant developments of the Company, its current state of affairs, and its future prospects, through various modes of investor interaction platforms such as quarterly investor calls, participation in investor meets/conferences, investor presentations, integrated annual report and annual general meeting among others.
Capacity Details (MTPA)
Market Capitalisation
Ambuja (standalone)
(` crore)
BSE 100 Ranking Company
(` crore)
The Company has implemented a paradigm shift from a traditional finance mindset to a business finance which provides long-term value creation and true business partnering. The Company is committed to create superior stakeholder value through efficient management of financial capital.
A unique and disciplined financial management approach, optimal and efficient use of resources and adoption of distinctive practices have enabled faster project completion and prudent capital allocation, leading to longterm value creation for all the stakeholders.
Set Mind – Traditional
- Traditional Bookkeeping (Past)
- Control focused
- Cost Centre-based approach
- Restricted internal communication
- Working Capital Management
Mindset – Enterprise Value
- Growth-oriented (Future)
- Gatekeeper for Compliance
- Broader approach covering ESG
- Multi-stakeholder engagement
- Focus beyond Cash flow and Liquidity management
Changing Risk Profile
- Counterparty Risk
- Supply Chain Risk
- Intellectual Property Protection
- Data Security
- Growth – Organic / Inorganic
Internal Operating Challenges
- Cost Management & Forecasting
- Maintaining employee morale
- Attracting / retaining qualified employees
- IT Infrastructure and transformation
- Process and operations
Regulatory / Stakeholder Management
- Local Government Policy
- Increased regulatory and stakeholder expectations
- Financial Regulations
- Trade policies and agreements
Market and Competitive Pressures
- Consumer demand
- Financial / banking system
- Credit market / interest rates
- Currency volatility
- Price volatility
Leveraging Group Synergy
Ambuja Cements is utilising various Group synergies to ensure financial prudence and profitability.
Intelligent PHYGITAL Infrastructure
Realty
Supply to upcoming projects – Dharavi, Navi Mumbai Airport, Ganga Expressway
Coal
Use AEL /ANR expertise in procuring coal and mining operations
Power &
Renewables
Leverage Adani Power Ltd’s expertise to improve CPP’s operational
ABEX
Services/
Digital Infra
Leverage shared services vertical of the Group, along with digital infra (IT)
Sportsline
Leveraging Adani Sportsline to showcase the Brand's value proposition
Logistics
Leverage APSEZ’s MMLPs to serve major demand centres and use the Company’s expertise in logistics to reduce cost
People
Talent movement within the Group across verticals
Fly Ash
Utilisation of fly ash generated from power plants
ConsistenC Model
The Company’s constant endeavour is to create long-term value and strengthen financial position while continuing to strengthen stakeholder relationships and trust. Towards this, the Company has implemented ConsistenC model:
Cost
Capex Initiative and leveraging Group synergy for reduction and optimisation of production cost
Capacity
Double the capacity from 79 MTPA to 140 MTPA by FY 2027-28 through organic and inorganic route
Customer
Engagement with the dealers, sales promoters, CFAs and technical partners, to provide solutions, not just products.
Collaboration
Collaboration with internal and external stakeholders
Connectivity
Drive enhanced Connectivity through digitisation initiatives
Capital Management Plan
Improving treasury return and working capital management; proper financing mix for the ongoing and future capex initiatives.
Compliance
Cement Industry needs to comply with various regulations like mining, Factories Act, labour laws, environmental laws, SEBI (LODR) guidelines and Companies Act among others
Care
Empathy towards employees through employee engagement, training, and development plan, providing the right working environment
Mergers and Acquisitions (M&A) and Integration
Ambuja Cements' strategic M&A activities have been pivotal in enhancing market presence and driving growth. The quick and successful integration of acquired entities have been meticulously executed, ensuring seamless alignment with the Group’s vision and values, thereby maximising synergies and delivering value to stakeholders. During the year under review, the Company successfully integrated Sanghi Industries and Asian Concretes and Cements into the Group’s cement business. Further, the Company has announced the acquisition of My Home Group’s 1.5 MTPA cement grinding unit in Tuticorin, Tamil Nadu in April 2024.
Hedging
To mitigate financial risks arising from market fluctuations, Ambuja Cements employs robust hedging strategies. These mechanisms enable the Company to manage exposure to volatile commodity prices, exchange rate fluctuations, and interest rate risks, safeguarding financial performance and enhancing stability.
ESG Benefits in Financial Terms
The Company’s commitment to Environmental, Social, and Governance (ESG) principles extends beyond altruism; it yields tangible financial benefits. By prioritising sustainability initiatives, it enhances operational efficiency, reduces costs, accesses new markets, and strengthens stakeholder relationships, thereby bolstering long-term financial resilience and value creation. The adequate capital expenditure is also planned for sustainability initiatives. The key examples are addition of RE powers, WHRS among others.
Journey from Opex to Capex
Ambuja Cements' strategic shift from operating expenditure (Opex) to capital expenditure (Capex) reflects the focus on long-term value creation and sustainable growth. This transition enables the Company to invest in cuttingedge technologies, modernise infrastructure, and enhance operational efficiency, laying a solid foundation for future prosperity.
Financial Engineering
Through innovative financial engineering, Ambuja Cements optimises capital structure, maximises shareholder value and mitigates financial risks. The Company’s adept utilisation of financial instruments, capital markets, and structured transactions enables it to navigate complex financial landscapes, driving sustainable growth and enhancing resilience amidst market uncertainties.
Case Study
‘udAAAn’ is a transformative journey aimed at propelling Adani Cement’s business to greater heights of success. This initiative encompasses a series of actions across various aspects of the Company's operations, playing a crucial role in enhancing Ambuja Cements' key performance indicators (KPIs).
udAAAn has made significant contributions to bolstering the financial performance of Ambuja Cements by enhancing operational efficiency and improving key financial indicators.