Ambuja Cements Q3 FY26 Results: Why Profit Fell 88% but Revenue Hit Record High

1. Introduction: The “Optical Illusion” That Spooked the Market

The moment Ambuja Cements announced its Q3 FY26 results on January 30, 2026, one number grabbed all the attention—and not in a good way. Net profit crashed nearly 88% year-on-year to ₹204 crore. For a large, well-known cement company, this kind of fall immediately raises alarm bells. The stock turned volatile, headlines screamed “profit collapse,” and many investors rushed to ask a simple question: Is the Ambuja story over?

But markets often make mistakes when they focus on a single headline number without reading the footnotes. This quarter is a textbook example of what analysts call an “optical miss.” While profit looks ugly on the surface, the core business performance is actually one of the strongest Ambuja has ever delivered.

In Q3 FY26, Ambuja reported its highest-ever quarterly revenue of ₹10,181 crore, up more than 21% year-on-year. Cement sales volumes jumped 20% to 18.4 million tonnes, growing at more than twice the industry average. Operating margins improved, costs fell sharply, and capacity crossed a historic milestone.

The thesis of this article is simple: the profit crash is accounting noise, caused by an unusually high base last year. The real story lies in volume leadership, cost control, and capacity expansion—all signs of a company in aggressive growth mode, not decline.

Ambuja Cements – Official Q3 FY26 Results

2. Q3 FY26 Financial Scorecard: Separating Noise from Signal

To understand what really happened, we need to compare Q3 FY26 with Q3 FY25 carefully.

Ambuja’s revenue rose to ₹10,181 crore, compared with roughly ₹8,400 crore in the same quarter last year. This growth did not come from price hikes alone. It came mainly from higher volumes, helped by newly integrated capacities like Sanghi Cement and Penna Cement, which are now fully contributing to sales.

Net profit, however, fell sharply to ₹204 crore, compared with ₹1,758 crore last year. At first glance, this looks disastrous. But last year’s profit included a large one-time deferred tax gain and exceptional items. These accounting benefits inflated Q3 FY25 profit artificially. When those one-offs disappeared this year, the comparison became distorted.

A better way to judge operational health is EBITDA. Ambuja’s EBITDA margin expanded to about 12.3%, up nearly 290 basis points from last year. This tells us that operating efficiency actually improved, even as the company chased volumes aggressively.

Another critical number is power cost. Average power cost fell from around ₹6 per unit to ₹4.5 per unit, thanks to higher use of waste heat recovery systems (WHRS) and renewable energy. In cement manufacturing, where power and fuel are the biggest expenses, this is a major structural advantage.

In short, profits fell because last year was abnormally high, not because this year is weak.

3. Volume Is King: Ambuja’s Aggressive Market Share Grab

The most important number in this quarter is not profit. It is volume growth.

Ambuja sold 18.4 million tonnes of cement in Q3 FY26, a 20% year-on-year jump. In comparison, the Indian cement industry is growing at around 7–9%. This means Ambuja is gaining market share, not just riding industry growth.

This volume surge reflects a clear strategic choice. Ambuja is prioritising scale and reach over short-term profit maximisation. The company is willing to operate with lower headline profits today to secure a larger footprint for the next decade.

The demand driving these volumes is not weak retail housing. It is infrastructure demand—roads, expressways, airports, metros, and government-backed construction projects. Under the PM Gati Shakti programme, cement demand from infrastructure has become more predictable and less price-sensitive.

This is why Ambuja’s volumes continued to grow even in regions where price competition remained intense.

4. Capacity Expansion: Crossing 109 MTPA Is a Strategic Milestone

One of the biggest but least discussed achievements this quarter is capacity.

Ambuja has now crossed 109 million tonnes per annum (MTPA) of cement capacity. Just four years ago, in FY22, this number was around 67 MTPA. This is a dramatic expansion in a very short time.

Management has already guided that capacity will reach around 118 MTPA by March 2026, and the longer-term target is 140 MTPA by 2028. This would firmly place Ambuja among the top cement producers in the world.

Capacity matters because cement is a scale game. Larger players enjoy lower logistics costs, better fuel sourcing, and stronger pricing power over time. By expanding capacity aggressively now, Ambuja is building a defensive moat against competitors like UltraTech and Shree Cement.

5. Cost Leadership: How the Adani Supply Chain Is Paying Off

Since becoming part of the Adani ecosystem, Ambuja has focused heavily on cost optimisation.

One of the biggest savings has come from power and fuel costs. By increasing the share of green power—solar, WHRS, and alternative fuels—the company has structurally lowered its cost base. Management aims to source around 60% of power from green sources over the next few years.

Logistics costs have also improved. Integration with ports, rail networks, and bulk terminals has reduced lead distances and improved dispatch efficiency. This is particularly important in cement, where transportation can account for 20–25% of total cost.

The result is visible in the EBITDA margin improvement despite intense competition. This shows that Ambuja is not sacrificing profitability blindly; it is lowering its break-even point while expanding volumes.

6. Premiumisation: Not Just More Cement, Better Cement

Another underappreciated trend is Ambuja’s product mix improvement.

Premium cement products now account for roughly 33% of total sales, up steadily over the past two years. These products command better margins and stronger brand loyalty, especially in urban housing and commercial projects.

Even though the company is pushing volumes aggressively, it has managed to keep realisation per tonne relatively stable. This suggests that Ambuja is not dumping cement at unsustainably low prices just to grow volumes.

In simple words, Ambuja is selling more cement and better cement at the same time.

7. Why the 88% Profit Drop Is “Optical Noise”

Let us address the headline directly.

Last year’s Q3 profit included a large deferred tax credit and exceptional income, which does not repeat every year. When analysts compare this year’s normal profit with last year’s inflated profit, the percentage drop looks extreme.

If we adjust for these one-off items, the underlying profit decline is far smaller—and in some adjusted scenarios, operational profit actually improves.

This is why professional analysts often say: “Never value a cement company on one quarter’s net profit.” EBITDA, volumes, and capacity utilisation tell a far more accurate story.

8. The Geoeconomic Context: India’s Infrastructure Super-Cycle

Ambuja’s performance cannot be separated from the broader Indian economy.

As highlighted in the Economic Survey 2025-26, government capital expenditure remains close to 4% of GDP, one of the highest levels in decades. Roads, railways, defence infrastructure, ports, and urban housing are all consuming large quantities of cement.

This infrastructure-led demand is less volatile than real estate cycles and provides long-term visibility. For a company with rapidly expanding capacity like Ambuja, this is the perfect demand environment.

In this context, Ambuja’s volume growth looks less like a short-term push and more like positioning for a multi-year cycle.

Ministry of Road Transport & Highways (Infra Demand Context)

9. Risks: What Could Still Go Wrong?

No analysis is complete without risks.

The first risk is price competition. If UltraTech or other large players initiate an aggressive price war to defend market share, margins could come under pressure again.

The second risk is valuation optics. With reported profit so low, traditional P/E ratios look meaningless. Investors must be willing to value Ambuja on forward earnings, not trailing numbers.

The third risk is execution. Rapid capacity expansion brings challenges—plant stabilisation, logistics bottlenecks, and integration issues. Any delay could hurt near-term returns.

These risks are real, but they are strategic risks, not signs of business weakness.

10. Conclusion: Ignore the Profit Crash, Follow the Cement Bags

Ambuja Cements’ Q3 FY26 results are a classic case where headlines mislead and fundamentals tell a different story.

Yes, net profit collapsed on paper. But revenue hit an all-time high. Volumes surged at double the industry rate. Margins improved. Costs fell. Capacity crossed a historic milestone.

This quarter shows Ambuja in “land-grab mode”—sacrificing optical profit to build scale, efficiency, and long-term dominance. For investors who understand infrastructure cycles, this is not a warning sign. It is a signal of strategic aggression.

As the saying goes in cement investing:
“Follow the trucks, not the headlines.”

Right now, Ambuja’s trucks are moving more cement than ever before.