Construction Industry News
Adani Cement, part of the Adani Group and the second largest cement manufacturer in India due to the acquisitions of ACC and Ambuja Cements, will improve profitability by 45-50% over the next five years, according to CEO Ajay Kapur. The company aims to achieve this growth by building new capabilities with cost advantages and taking strategic initiatives to improve the profitability of the existing plant.
Kapur stated that target EBITDA (earnings before interest, taxes, depreciation and amortization) per tonne is expected to increase from ₹1,000 to ₹1,450-1,500 over the next five-year cycle. The current EBITDA margin of 20% is expected to improve to 25%. Adani Cement plans to double its capacity to 140 million tons within five years, requiring an estimated $470 billion in capital expenditure.
Kapur emphasized the importance of cost efficiency and wanted to position the company as a low-cost cement producer worldwide during its expansion to 140 million tons. Initiatives are expected to result in savings of Rs 300-400 per tonne over 36 months, with additional cost benefits expected from the new capacities and improved logistics.
The company's ambitious targets also include achieving sales volume of 120 million tonnes, revenue of Rs 700 billion and operating profit of Rs 175 billion by March 2028. Funding for the capacity expansion will come from corporate profits and cash equivalents, with Adani Cement's capacity set to exceed 100 million tonnes by the end of 2025.
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