Karan Adani
| Photo Credit:
SANDEEP SAXENA
Ambuja Cements Ltd is cutting its capital expenditure by around 15% to ₹6,000–₹6,500 crore for FY27 from about ₹7,500 crore in FY26, as it “pauses and course corrects” its execution strategy to fix project delays, cost overruns and underperformance in acquired assets.
“Our capex has not been up to the mark. It is one of the reasons why we are pausing and correcting ourselves,” said promoter Karan Adani, adding that the company will first complete ongoing projects before taking up new ones. Adani said the company is stepping back due to execution gaps across projects, including wrong contractor selection, absence of execution teams at the time of acquisition, and projects being started without full engineering readiness. “We did not choose the right contractor… there was no team initially… and a lot of projects were started without full engineering being done,” he told investors on Monday evening, adding that the company will use the next six months to complete engineering and reset project execution discipline.
Adani stressed that the company is not abandoning growth plans but is resetting timelines rather than targets. “We are not moving away from the targets, but we are moving away from the timeline… it makes sense to step back and course correct,” he said. The operational stress is most visible in recent acquisitions Sanghi and Penna Cement, where major breakdowns, delayed maintenance and lower reliability have impacted performance. “The breakdowns in acquired assets, especially in Penna and Sanghi, have been a problem area,” Adani said, adding that focus is now on improving plant reliability and stabilisation.
In pause and course-correct mode
He added that the company is in a “pause and course correct” phase, focused on fixing execution discipline, improving cost structure and stabilising acquired assets before accelerating expansion again. Adani said the reset is driven not only by execution delays but also by a structural rework of the company’s manufacturing and logistics footprint, which he said has been impacting cost competitiveness. “Majority of the recalibration is happening in the North — in UP and Bihar — and in Southern Gujarat and Maharashtra,” Adani said, indicating a targeted optimisation of demand-heavy regions.
He added that the structure of acquired assets is also being reshaped, with Sanghi transitioning toward a clinker-led role in the next phase. “Sanghi is predominantly a clinker plus cement asset. In the next year, you will see it predominantly moving towards clinker, with new capacities coming up on the coastal Gujarat region. Dahej is a classic example where Sanghi will supply clinker and the grinding units will supply cement,” he said.
Vinod Bahety, Chief Executive Officer of Ambuja Cements Ltd, said the company faced higher-than-expected costs, driven by longer lead freight, fuel inflation, packaging costs, state levies and branding expenses, with March alone seeing a ₹25 per bag spike. He said FY26 cost of production stood at around ₹4,400 per tonne, against an internal target of ₹4,000 per tonne, though it improved to about ₹4,100 per tonne in March.
Integration of acquired assets remains uneven, with Sanghi operating at 56% utilisation and Penna at 46%, while legacy assets are performing better at 75–80% utilisation and Orient Cement at full capacity. He said turnaround has taken longer due to higher maintenance capex and deferred upkeep requirements. Bahety added that some efficiency capex projects are delayed by 3–6 months, while breakdowns at Penna have added to repair and maintenance costs.
Despite the reset, Ambuja continues expansion. FY26 capacity rose to 109 million tonnes, supported by commissioning of 10.7 million tonnes of grinding capacity and 7 million tonnes of clinker capacity. The company is targeting around 119 MTPA by end-FY27, though timelines are now being recalibrated.
Future expansion will be more selective and cost-driven, with focus on regions where the company has strong market share and logistics advantage, to reduce costs. Key projects include a new limestone block in Assam and a clinker line at Mundra.
Published on May 5, 2026
