| Ambuja Cements Limited | ||||||
| Ratings reaffirmed at 'Crisil AAA / Stable / Crisil A1+ '; Rated amount enhanced for Bank Debt | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its 'Crisil AAA/Stable/Crisil A1+' ratings on the bank facilities and short-term debt programme of Ambuja Cements Ltd (Ambuja Cements; part of the Adani group).
The ratings factor in the strong business risk profile by virtue of Ambuja Cements and ACC Ltd (ACC; ‘Crisil AAA/Stable/Crisil A1+’) together being the second-largest cement group in India. The group had installed cement capacity of 107 million tonne per annum (mtpa) as on September 30, 2025. The strong presence of the Adani group in power, logistics and coal trading verticals will result in structural reduction in the production cost in the cement business owing to synergy benefits which shall further strengthen the business risk profile over the medium term. The financial risk profile of the company will remain strong over the medium term supported by a debt-free balance sheet and robust liquidity. The promoter holding company of the Adani group had raised ~$6.3 billion to fund the acquisition of shares from Holcim Ltd through a mix of debt, equity and shareholder loans without any commitment from Ambuja Cements and ACC to meet the principal or interest obligations. As on September 30, 2025, $3.95 billion debt was outstanding at the holding company level.
Crisil Ratings has noted the public announcement made by the company regarding the board of directors' approval for the amalgamation schemes between ACC and Ambuja Cements, and between Orient Cement Ltd (OCL) and Ambuja Cements, on December 22, 2025. These schemes are subject to approval from creditors, shareholders, National Company Law Tribunal (NCLT) etc. and are expected to be completed within 12 months. These transactions doesn’t involve any cash consideration; Ambuja Cements will issue and allot equity shares to the shareholders of ACC and OCL in the pre-defined swap ratio. Once implemented, it should simplify the existing corporate structure and could also result in some cost optimization. Crisil Ratings does not expect this transaction to have any material adverse impact on the credit risk profile of Ambuja Cements and ACC, as the current assessment already factors in the combined business and financial risk profiles of Ambuja Cements and all its subsidiaries. Any impact on companies’ operations or material cash outflow arising out of these schemes will remain monitorable.
The group has sizeable capex plans to the tune of ~Rs 9,000-10,000 crore annually to achieve the intended target of reaching consolidated cement capacity of 155 MTPA by 2028, through a mix of greenfield and brownfield expansions as well as acquisitions. The company is also focusing on extracting synergies between itself and its subsidiaries as well as within the larger Adani group to reduce cost of production and generate healthy cash accruals to support these capex plans. While the extent of improvement in cost of production from higher synergies remains monitorable, Crisil Ratings believes that the organic capex plans would be largely funded via internal accruals and the robust liquid surplus and hence does not expect material leveraging of the balance sheet.
During first half of fiscal 2026, the consolidated sales volume increased to 35 MT, against 29.1 MT in the corresponding period in previous fiscal, partly attributable to the incremental volumes from the facilities acquired during fiscal 2025. Profitability as reflected in earnings before interest, tax, depreciation and amortization (EBITDA) per ton improved to Rs 1,064 during the same period (as against Rs 820 in the first half of fiscal 2025) supported by better realisations. Further the company has completed the acquisition of 72.66% stake in OCL for a cash consideration of Rs 5,910 crore.
With expected improvement in demand, ramp up in utilisation of recently acquired units, investments in renewable power, optimisation of logistics footprint, and synergies between Ambuja Cements, its subsidiaries and other group companies, the operating performance is expected to improve going forward.
The ratings continue to reflect the strong pan-India market position of Ambuja Cements and ACC combined, its robust operating efficiency and strong financial risk profile, driven by healthy cash flow and the debt-free position. These strengths are partially offset by susceptibility to the commoditised and cyclical nature of the cement industry. Substantial leveraging of the balance sheet or change in financial policies, which could weaken the financial risk profile, will be a key rating sensitivity factor. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of Ambuja Cements, ACC and all other subsidiaries/JVs/associates. This is because all these companies have a common line of business and management. They operate as one unit symbiotically and optimise each other's plant capacities and spare inventories, and thus, benefit from operational, managerial and financial synergies.
Debt in ultimate holding company/companies of ACC and of Ambuja Cements has not been consolidated as it is non-recourse to these entities and will likely be serviced via cash flow streams at the promoter level not limited to dividends of either company.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Strong market position ACC and Ambuja Cements (with their subsidiaries) together had an installed capacity of 107 mtpa as on September 30, 2025, with a pan-India presence making it the second largest player in the cement industry. They have 24 integrated units, 22 grinding and blending units, 116 ready-mix concrete plants and more than 120,000 plus channel partners with nation-wide presence. The companies jointly hold 14-15% capacity share in the domestic market as of March 31, 2025. These factors shield the operations from price volatility in regional markets and demand-supply imbalance.
Healthy operating efficiencies Consolidated operating margin has been healthy, aided by high proportion of blended cement (around 77%), low clinker factor (~67%) and 33% energy consumed from renewable and green sources during the quarter ended September 2026. The company has announced investments of Rs 6,000 crores to add 1000 MW of renewable capacity by end of fiscal 2026 to further augment the power mix towards low-cost WHRS/wind/solar projects, so as to sustain its superior operating margin over the medium term. Out of this target, 673 MW of wind and solar projects have already installed as on date. For fiscal 2025, consolidated EBITDA margin moderated to 17.0% (against 19.2% for fiscal 2024).
As per Crisil Ratings, the company had a sizeable networth of ~Rs. 54,800 crore as of March 31, 2025 (enhanced with equity infusion of Rs 15,000 crores received against conversion of share warrants in March-April 2024; this is in addition to Rs 5000 crore received while issuance of the warrants in October 2022) lending strength to its balance sheet. Further, strong cash flow and debt free position translate into robust debt protection metrics. While the cash and equivalent have gradually declined to ~Rs 1,800 crore as on September 30, 2025 after meeting the payouts towards acquisitions, it remains adequate.
The ultimate holding companies of cement business (i.e. of Ambuja Cements and ACC) have outstanding debt of ~$3.95 billion with bullet repayments (in two tranches i.e. ~$2.35 billion during fiscal 2027 and ~ $ 1.6 billion during fiscal 2028) and semi-annual interest servicing. The management has articulated to service this debt from the existing liquidity and cash flows generated at the group level from interest and dividend income, along with refinancing of the principal amount. Further, the cash balance and cash accrual of ACC and Ambuja Cements will be primarily utilised towards their growth capex. Therefore, the financial risk profile is expected to remain strong. However, any substantial increase in dividend or support to group/holding company from cash flows of ACC and Ambuja Cements may potentially weaken the credit risk profile of these companies and thus, would be a key monitorable.
The company at a consolidated level is likely to incur a large capex of nearly Rs 38,000 crore (including payout done for OCL acquisition) over fiscals 2026 to 2028, towards capacity addition, captive power plants, plant maintenance and other infrastructure development. These are likely to be majorly funded through internal accrual and existing liquidity, with minimal reliance on debt. Proceeds from the equity infusion by the promoters and healthy cash accruals of the company will ensure negligible reliance on debt to fund capex. |
Key Rating Drivers - Weaknesses Susceptibility to volatility in input cost and realisations, and cyclicality in the cement industry Capacity addition in the cement industry tends to be sporadic because of the long gestation period for setting up a facility and numerous players adding capacity during the peak of a cycle. This led to unfavourable price cycles for the sector in the past. Moreover, profitability remains exposed to volatility in input prices, including raw material, power, fuel and freight. |
Liquidity Superior At a consolidated level, cash and equivalent stood at ~Rs 1,800 crore as of September 30, 2025 (down from ~Rs 10,000 crore as on March 31, 2025 due to payout towards OCL acquisition and working capital buildup). Available cash and equivalent, unutilised bank limit and healthy cash accrual of over Rs 7,000 crore per annum will suffice to meet working capital requirement and capex going forward. |
Outlook Stable Crisil Ratings believes Ambuja Cements will maintain its strong financial risk profile over the medium term, supported by healthy cash accrual and low reliance on debt. |
Rating sensitivity factors Downward factors
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About the Company Ambuja Cements is one of India’s leading cement manufacturers with an installed capacity of 107 mtpa at a consolidated level as of September 2025 (57.6 mtpa at a standalone level). In January 2006, Holcim acquired a 14.8% stake in Ambuja Cements. Following an open offer in April 2006, Holcim assumed management control of the company. Post restructuring between ACC and Ambuja Cements, effective from August 12, 2016, ACC became a subsidiary of Ambuja Cements.
ACC is the oldest cement company in India, with standalone installed capacity of 40.4 MTPA as of September 30, 2025. The company also manufactures ready-mix concrete and has over 116 plants across the country. |
Key Financial Indicators* – Ambuja Cements (consolidated)
*as per Crisil Ratings analytical adjustment |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
& - Fully-interchangeable with Bank Guarantee
$ - Upto 80 Cr interchangeable with Bank Guarantee
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Annexure – List of entities consolidated
*Subsidiaries of ACC Ltd |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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