SANGHIINDNSEApril 29, 2025

Sanghi Industries Limited

10,456words
95turns
18analyst exchanges
2executives
Management on call
Vinod Bahety Mr. Rakesh Tiwary Chief Executive Officer Chief Financial Officer Mr. Deepak Balwani
HEAD, INVESTOR RELATIONS
Rajesh Ravi
HDFC SECURITIES LIMITED MODERATOR
Key numbers — 40 extracted
rs,
harpens commitment to growth supported by internal talent development. Over the last couple of years, Mr. Vinod Bahety has been setting the foundation for making Ambuja Cements as an industry leader.
100 million
will remain special because, friends, I'm happy to share that Ambuja Cement has crossed more than 100 million tons of cement capacity, becoming the ninth largest cement company globally. Others have taken de
5.7 million
dated by SBTi. Through our community engagement initiatives, we have delivered societal value for 5.7 million lives. I would like to share some of the high-level highlights before diving into specifics. 99-m
1,000 megawatt
at Khavda has been commissioned in Q4 FY '25. I had mentioned last time that by June '26, entire 1,000 megawatts will be up and running. Already, we have achieved 300 megawatts. 367 million tons of new limesto
300 megawatt
t time that by June '26, entire 1,000 megawatts will be up and running. Already, we have achieved 300 megawatts. 367 million tons of new limestone reserves secured in Q4 '25, taking the total limestone reserv
367 million
June '26, entire 1,000 megawatts will be up and running. Already, we have achieved 300 megawatts. 367 million tons of new limestone reserves secured in Q4 '25, taking the total limestone reserves to 9,000-pl
100 million
a and the debottlenecking of capacity at various plants, as I mentioned, that we have now crossed 100 million tons. Sooner, we should be also announcing additional grinding units to be commissioned in Q1, pr
118 million
d in Q1, primarily Sankrail and Sindri. And with every prospective quarters, we should be hitting 118 million metric tons by end of this financial year. The consolidated quarterly Y-on-Y performance is as un
INR 9,889 crore
nancial year. The consolidated quarterly Y-on-Y performance is as under. We achieved a revenue of INR 9,889 crores, up by 11% Y-o-Y, driven by strong focus on our micro market management strategy, expansion of o
11%
idated quarterly Y-on-Y performance is as under. We achieved a revenue of INR 9,889 crores, up by 11% Y-o-Y, driven by strong focus on our micro market management strategy, expansion of our ground ne
82%
cro market management strategy, expansion of our ground network, blended cement, which remains at 82% and increase in premium products as a percentage of our overall trade sales, which is up by 5.3%
5.3%
t 82% and increase in premium products as a percentage of our overall trade sales, which is up by 5.3% to 29.1%. Operational costs for the quarter stood at INR4,104 per ton. This is driven by better f
Guidance — 20 items
Vinod Bahety
opening
“I had mentioned last time that by June '26, entire 1,000 megawatts will be up and running.”
Vinod Bahety
opening
“The consol FY'25 Y-on-Y performance is as under: highest ever annual revenue of INR35,045 crores, operational cost at INR4,275 per ton, EBITDA stood at INR5,971 crores and EBITDA per ton at INR915 as we aim -- this INR915 is for the year, but now our journey anyway is going to be towards achieving INR1,500 EBITDA per ton by FY '28.”
Vinod Bahety
opening
“Our growth journey continues as we aim for 118 million tons by FY '26 and 140 million tons by FY '28 through largely this time driven by organic expansions.”
Vinod Bahety
opening
“The overall project progress for Sankrail is 88%.”
Vinod Bahety
opening
“So and so forth, I think the entire road map for the project expansion is there in the presentation.”
Vinod Bahety
opening
“As previously explained to meet our requirements, we aim to maximize captive coal consumption.”
Vinod Bahety
opening
“Linkage coal rate plant through GPWIS rake, which is like our own rakes, first time in cement industry, thus ensuring regular low-cost linkage movement to expect start from Q2 of '26.”
Vinod Bahety
opening
“Leveraging of group synergy in booking of low-cost imported pet coke and imported coal is the underlying point, which will be there continuously right from the beginning, it has been helping us.”
Vinod Bahety
opening
“His strategic insights will be instrumental in expanding our market presence and enhancing customer engagement.”
Vinod Bahety
opening
“Rakesh's expertise is in financial management and his deep understanding of the industry will be crucial in steering our financial strategy and ensuring robust financial health.”
Risks & concerns — 2 flagged
So from that perspective, having deployed the cash and the recent -- I mean, the interview, which I may be mentioning, in general, your view, can we say that the competitive intensity in the industry can be expected to get soften a little bit from here on and overall industry profitability could improve?
— Navin Sahadeo
Or you think that no, there is still room for more M&As and hence, it can be remain volatile?
— Navin Sahadeo
Q&A — 18 exchanges
Q
Two questions from my side. Heartening to hear that cost optimization journey is on track. But can you please help us understand the quantum of cost savings achieved during the year? Also is there any change in the guided benefits of INR100 per ton in fiscal '26 and INR150 in fiscal '27? That's my first question.
Vinod Bahety
Thank you, Rahul. When we started way back in September '22, we had been at the levels of INR4,250 around of cost. And then somewhere like in March '24 quarter , we have been at, say, INR4,170 around that level, and then we committed to achieve INR3,650. In this journey, so far we have achieved already around INR150 to INR175 per ton of cost and the balance INR300 to INR325 per ton is what we are going to expect in FY '26 to up to '28. Now this cost largely will be driven by 3, 4 factors. One is our continued investment on WHRS, AFR and renewable power as one component. And second is the fly a
Q
So my first question actually is on ACC. So there were a few like transactions in ACC, which I just wanted to understand better. So one, there was some land purchase under ACC Mineral Resources, which was for about INR680-odd crores. So could you help understand like to what is this land for? And by when can we expect -- I believe new capacities also are planned on this. So some clarity on that, please.
Vinod Bahety
Yes, yes, sure. I think there have been these investments which is coming from ACC. I can actually answer your question on a larger level so that if there are any other questions, which will -- I'm pre-empting it so that it can be replied in one go. See, overall, for example, in terms of ACC, there has been an outgo of, say, almost INR1,100 crores in terms of the cash balance from INR4,660 crores to INR3,590 crores. Now on top of it, we also had this EBITDA and other income. So if I add to that, then the overall investment is around INR4,500 crores in case of ACC, out of which INR2,300 crores
Q
Just this last one if I can. It's related to the earlier question. So there's some impairment also of the cement plant. So I also wanted to understand that what was this impairment for?
Vinod Bahety
Amit, we have also, I think, highlighted that some of the old assets, which are clinker units, but we find now unfeasible are like Bargarh, Chaibasa and the Wadi line number 1, so which we have decided right now to put them off. And therefore, proactively, we are providing for those assets. If I'm not wrong, it is around close to INR200-odd crores, which is what we have provided. But this is purely like a proactive prudently prudent accounting so that down the line, we will decide not to -- to actually discontinue these assets from a clinking perspective. So far as grinding is concerned, Barga
Q
I have 2 questions. First, on other financial assets on consol, there is about a INR1,700 crore increase from March last year to this year. So one, what is this related to? And second, on the land acquisition that you have done in ACC, the grinding unit that you talked about, is it part of the plan to INR140 crores? Or would it be beyond that?
Vinod Bahety
Okay. Let me address to the first question. And in terms of your other financial assets, let me just figure out. So other financial assets, this is closer -- so the numbers which I have right now with me, which is 18, this is the one probably what they're referring to. Just a sec, Indrajit. Yes. I'm looking at the noncurrent part. With me. So there is an increase in terms of the government grant, which is close to overall increase of INR109 crores. Then there is -- basically, it's more about the fixed deposits, which are getting reclassified between current and noncurrent. So there are 2 compo
Q
Great commentary indeed, very assuring. Two questions. One is that of the total promoter fund infusion, which was sum of INR20,000 crores, post the -- I think the Orient deal and of course Sanghi, the entire cash deployment is largely done. And also, I think a couple of months back in one of your maybe media interviews, you did mention that Ambuja will focus on more on organic expansions now. So from that perspective, having deployed the cash and the recent -- I mean, the interview, which I may be mentioning, in general, your view, can we say that the competitive intensity in the industry can
Vinod Bahety
Navin, very interesting. Thanks. So in fact, the promoters infusion of INR20,000 crores -- and as you know, sum total of all our acquisitions so far after Ambuja and ACC, the enterprise value is almost INR25,000-plus crores. Therefore, in fact, we have also used the existing cash and cash equivalent for the overall, say, acquisitions, and we are also sitting on a good level of, say, further for the growth prospects. Now so far as the prospects for the industry is concerned, I would say more than the action of, say, M&A, I think overall demand levers are better in terms of the government spendi
Q
Congrats for the results. My first question is on your capex and cash flow position. So your cash flow was INR10,000 crores. So after Orient Cement pay down, what will be the cash position in April? And is there open offer? What is the timing of that? And overall cash also related to Orient Cement, what is the expectation?
Vinod Bahety
Okay. Thank you, Prateek. So in terms of open offer, we have already deposited the entire amount under open offer closer to around INR2,000 crores into SEBI escrow, and we are expecting the SEBI's clearance of the detailed letter of offer, so that it will move faster. That is one on the open offer. But in terms of the investment, it's already put into the SEBI escrow. So far as the overall cash flow is concerned post Orient, and as you know, that Orient, we have acquired 46% at closer to overall outflow of around INR5,500 crores, INR5,600 crores. After that, I'm sitting almost now on, say, INR
Q
Your voice is not clear. I'm not able to hear properly. Yes, sorry, yes, over to HDFC because I'm not able to hear his voice properly. There is some disturbance.
Management
Q
Congratulations for a good set of numbers. So just one question. What would have been the contribution from Penna and Sanghi in terms of volumes in Q4?
Vinod Bahety
So in terms of volumes of Penna and Sanghi, so far as Penna is concerned, Penna's volume together, I would say, like both together is around 1.6 million tons for the quarter of March '25. There is a mobile -- there is a disturbance again. Can you, someone, switch off the mobile also, please? Yes. So around, say, 1.6 for the quarter, but as I said no, this will ramp up substantially with Sanghi coming into its fullest avatar.
Q
So, see, 1.6 is for Penna or Sanghi? I'm sorry, they both…
Vinod Bahety
It is both together. I will not give you specific details, but it is for both together, it is there. I can come back to you with specific, but on an overall basis, it is 1.6.
Q
Sir, the first question is on the capex. Can you just share for FY '26 and '27 for our existing ongoing, what would be our organic capex? And broadly, if one could split between projects -- not projects, but on expansions on WHRS, on overall renewable, some breakup?
Vinod Bahety
Sumangal, in terms of capex, let us say the growth capex is closer to around INR6,000 crores. And so far as my efficiency capexes are concerned, let us say, between INR2,500 crores to INR3,000-odd crores, so we are looking at closer to, say, INR9,000-odd crores. Some of them are discrete and some of them are ongoing. So as you know that -- and I mentioned to you around 18 million tons of cement, which will be coming. So one component of this capex out of this INR6,000 crores capex will be that part. Now so in terms of my efficiency capexes, it will be primarily with respect to the WHRS, the BC
Q
Sir, on the capacity for ACC, which -- the clinker capacity, which you think will be dismantled, what is the total capacity for the 3 plants put together? And the second part of the same question is then versus the 89 million ton clinker capacity that we are indicating in the presentation, does it include any further expansion which is currently not listed there? Or the real number will be lower than 89 once you scrap the 3 plants?
Vinod Bahety
No. So in terms of -- let us first address in terms of the capacity for, let us say, Wadi I, it is around, say, 1 million tons. So far as Bargarh is concerned, also like 1 million. And so far as Chaibasa is concerned, around 0.6 million. So altogether, say, 2 or 2.5 million. And when we say 89 million for FY '28, this is already after factoring in this -- basically reduction of these capacities. This is part of the whole plan of 140 million tons journey. Ashish, does it answer your question? Yes. Sir, it does.
Q
Yes. Sir, 2, 3 things. First, the INR3,650 cost reduction that we are talking, what's the number for fourth quarter for that or maybe for FY '25?
Vinod Bahety
So far as the fourth quarter number is concerned, we are actually at closer to INR4,250 a ton, right? So we are -- in a way, we should be higher of, say, around INR500 as of now. But this is like a variable which keeps moving. So this INR4,200 is what we'll be moving to INR3,650 with all the investment what we are planning to. Okay. Got it. And second, on the incentive part…
Q
Sir, what is the industry level supply that we are looking at for next 2 fiscals? The average number would also do fine.
Vinod Bahety
So, Ritesh, I will actually stretch myself to, let us say, up to 2030. And to me, industry supply will be at, say, 6% CAGR while demand will be at 7% to 7.5% CAGR. And therefore, I am at least bullish in terms of demand outpacing supplies. And therefore, we should have a good level of capacity utilization and holding up of the prices with a positive uptick. So these are like we should be targeting to, let us say, hit around, say, 950 million tons of cement capacity by 2030. And versus that, while demand overall in absolute terms will be lesser, but the overall growth, it will be bridging close
Q
Just want to check on, follow up on the question around impairment. How long have these plants been non-operational? What has been the main reason? And when you look at some of the other assets ACC has, are you confident that Lakheri, Kymore and all will also not have some impairments in the next couple of years?
Vinod Bahety
Thank you, Satyadeep. I think Kymore is one of the best assets. I just was there recently 2 days back. There is no per se any thoughts of anything on that. It's like 100-plus years of plant. But as you know, that we already have invested into overall up gradation of this plant. So generally, when you have the limestones, so Kymore, Ametha are like neighboring plants and with sizable limestone reserves. So that is, for example, you should allay any kind of concerns over there. So far as these 3 assets which I have mentioned, they have been -- basically, they are always an opportunistic asset de
Q
Sir, if you could just talk about exit capacity utilization for Sanghi, Penna and Orient, that will be helpful.
Vinod Bahety
Exit for FY '26, I have the number. No, FY '25. Okay. FY '25. So far as FY '25 is concerned, Sanghi is around 40% to 45%. So far as Penna is concerned, as I said, clinker is at a very good levels of 75%, 80%. And so far as cement is concerned, it is also hovering around, say, 45% to 50%. And so far as Orient is concerned, it's a listed company, you would know, bt it is hovering between 60% to 75%.
Q
Sir, my question is on the profitability. So last couple of days, our peers have been reporting the numbers and have been looking at their profitability. So especially the question was on the EBITDA per ton. So our recent peer has reported our EBITDA per ton in around 4-digit numbers. And we are looking at mostly our capacity is pan-India. When our peers currently, I can name Dalmia Bharat, which has mostly capacity in the south where there has been more pricing issue. Then to the EBITDA per ton of this company is around INR1,000 per ton. So if you can comment on that, how are we looking to in
Vinod Bahety
The bulk is good. Like in terms of Dalmia, if you have seen, since you have specifically highlighted his name. So like you will know that Dalmia's overall ratio on the AFR and WHRS, especially on the AFR, they have a very healthy ratio. And the cost of fuel, therefore, for them is an advantage, which is a matter of time for us also now that we are already having a pipeline of all the AFR assets. And I told you, we are targeting around 75% at the overall, say, business level. And therefore, what -- for example, during Holcim days, what they have not done the investment and the other players did
Q
Congratulations to Mr. Bahety on the elevation and congrats on good numbers. Just can you give us a flavor on the pricing across pan-India? And what's your view in overall pricing terms, whether it be south or north? And how do you see the scenario going forward?
Vinod Bahety
Good question, Pankaj. Like price is the biggest value driver in our industry. And like if you look at from December to March, different companies have already given the numbers. So the prices have improved price per bag between INR7 to INR10, for example. And as we move into, say, this financial year, again you are seeing a healthy trend on the price, which is better than what people have achieved in March. So prices in last 4 months, I will say that there's a good momentum backed by a buoyancy in the demand in the government capex spending and overall, say, consumption markets of the cement.
Q
Thank you. I hope most of the questions have been answered, and we are available to discuss it separately between 4:00 to 6:00 pm. You have my number. Please call me separately for unanswered queries.
Vinod Bahety
Thank you, friends again. It is my pleasure that on this quarter, which is special, achieving 100 million capacity milestone is always special. And thank you that we are part of this journey. Look forward to achieve many more such successful milestones. Thank you again.
Speaking time
Vinod Bahety
34
Moderator
20
Amit Murarka
5
Indrajit Agarwal
5
Prateek Kumar
5
Rahul Gupta
3
Deepak Balwani
2
Navin Sahadeo
2
Parvez Qazi
2
Sumangal Nevatia
2
Opening remarks
Rajesh Ravi
Thank you, Alaric, and thank you, everyone, for joining in this call. I welcome you all from on behalf of HDFC Securities. I now hand over the call to Mr. Deepak Balwani, Head of Investor Relations. Over to you, Mr. Deepak.
Deepak Balwani
Thank you, Rajesh. First of all, apologies for the delay. On behalf of Ambuja Cements, I would like to extend a warm welcome to all participants joining us for the earnings call for the fourth quarter FY '25. Ambuja Cements Limited is one of the India's leading cement companies and a member of the diversified Adani Group, the largest and the fastest-growing portfolio of diversified sustainable businesses. As Adani Group continues its rapid expansion across industries and geographies, Cement business is implementing a strategic leadership realignment that sharpens commitment to growth supported by internal talent development. Over the last couple of years, Mr. Vinod Bahety has been setting the foundation for making Ambuja Cements as an industry leader. As CFO, Mr. Bahety led the acquisitions of Sanghi, Penna, My Home, Asian Cement and the most recent Orient Cement. Mr. Bahety has now been elevated to the role of Whole Time Director and Chief Executive Officer of the company with effect
Vinod Bahety
Thank you, Deepak. Good afternoon, and a warm welcome to each of you for our Q4 and FY 25 Earnings Call. This quarter and these results will remain special because, friends, I'm happy to share that Ambuja Cement has crossed more than 100 million tons of cement capacity, becoming the ninth largest cement company globally. Others have taken decades, but we have achieved this in 30 months. We continue to strengthen our position as a market leader in the cement industry. Adani Cement is getting stronger over time, underscoring our strategic focus on growth, operational excellence, increasing market presence, strengthening ground network, efficiency improvements and cost leadership. We remain committed to sustaining our market share by achieving consistent volume growth and high ESG performance, delivering unmatched value for our stakeholders. We are happy to share that our subsidiary, ACC, has become India's first large-scale cement company with science-based net zero targets validated by
Rakesh Tiwary
Yes. Thank you, Vinod, for the inspiring talk, and then it was really great. So good afternoon, everyone, and it's great to connect with all of you today at such a pivotal moment in our journey. Over the past few quarters, we have been relentlessly focused on 4 pillars, which are growth, ESG, cost reduction and stakeholders' value creation. And I'm thrilled I'm going to update you on all these 4 pillars as to how we are delivering across all the fronts. But before I proceed, let me take the first thing first, the major milestone. Ambuja Cement has crossed 100 million tons per annum and a big congratulation to Vinod, under whose leadership the same has been achieved in a very short period of 30 months. And it's really a congratulatory time to Vinod and entire cement team and to the entire Adanian. And this is like we are just getting started. We are on the course to hit 118 MTPA by financial year '26 and 140 MTPA by financial year '28 as we have promised in September '22. The recent acq
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