SYNOPSIS Ambuja Cement, undergoing structural consolidation under the Adani Group, is set to expand capacity from 107 mtpa to 155 mtpa by FY28, narrowing the gap with UltraTech (192 mtpa). With cost savings of about Rs. 100/tonne, it is becoming a strong challenger to UltraTech in India’s growing cement market.
India’s cement industry is growing fast, driven by rising construction, infrastructure projects, and housing demand. Big companies like UltraTech, Ambuja, and Shree Cement lead the market. Ambuja Cement, in particular, is undergoing structural changes aimed at improving efficiency and expanding its reach, which has sparked discussions about whether it could eventually overtake UltraTech and become the top cement company in India.
Industry Overview
India is the second-largest cement producer in the world, with installed capacity of around 700 million tonnes per year, while actual cement consumption is about 450 million tonnes. Demand is growing at 6–7 percent annually, supported by housing and infrastructure spending, and India’s per-capita cement use (~290 kg in FY24-25) is still well below the global average. By 2030, cement demand is expected to rise to around 670 million tonnes, which means higher utilisation and continued capacity expansion.
India’s cement industry remains highly competitive, marked by regional strongholds, fluctuating demand, and sensitivity to input costs such as power, fuel, and logistics. While long-term infrastructure and housing demand remain supportive, near-term pricing pressure and capacity additions have kept margins under check. In this environment, scale, cost efficiency, and pan-India reach have become critical differentiators, pushing large players towards consolidation.
With market capitalization of Rs. xxx crore, Ambuja Cements Ltd trading at Rs. xxx on Thursday, and JSW Infrastructure Ltd, with market capitalization of Rs. xxx crore, trading at Rs. xxx on Friday.
UltraTech Cement Limited, founded in 2000 and headquartered in Mumbai, is India’s leading cement manufacturer and a subsidiary of Grasim Industries. The company produces and sells cement, clinker, ready-mix concrete, and related building materials across India and select overseas markets including the UAE, Bahrain, and Sri Lanka. Its portfolio also includes white cement, putty, dry mortars, waterproofing solutions, TMT steel, paints, pipes, sanitary ware, tools, and flooring products, sold through UltraTech Home Expert retail stores, along with value-added construction services.
Ambuja Cements Limited, founded in 1981 and based in Ahmedabad, manufactures and sells cement and related products across India. Its offerings include Portland pozzolana cement, ordinary Portland cement, temperature-resistant concrete blocks, Blaine Portland cement, and micro materials, catering to homebuilders, developers, infrastructure projects, contractors, architects, and engineers. The company belongs to the Adani Group.
The Merger Strategy
Ambuja Cements is at the centre of Adani Group’s ambitious plan to build a pan-India cement giant. With the proposed merger of ACC and Orient Cement into Ambuja, alongside earlier consolidations of Sanghi Industries and Penna Cement, the group is moving decisively towards creating a single, integrated cement platform. The strategy is clear: simplify structure, unlock synergies, and narrow the gap with market leader UltraTech Cement.
The Ambuja-led consolidation will bring together ACC’s strong northern franchise, Orient Cement’s established southern presence, and Ambuja’s nationwide footprint. Once completed, the merged entity will have a well-balanced regional mix across north, south, east, west, and central India. Importantly, the brands will continue to operate independently at the customer level, preserving brand equity while backend operations such as procurement, logistics, and supply chains are unified under Ambuja.
Management estimates cost savings of nearly Rs. 100 per tonne from pooled manufacturing, optimized logistics, and reduced overheads. This is meaningful when compared with Ambuja’s EBITDA per tonne of just over Rs. 1,040 in the first half of FY26. Analysts expect further benefits from improved capacity utilization, streamlined capital allocation, and the removal of overlapping corporate structures. These efficiencies, rather than mere capacity growth, form the backbone of the consolidation story.
Production Capacity
Post-consolidation, Ambuja’s capacity is projected to rise from around 107 million tonnes to nearly 155 million tonnes per annum by FY28. UltraTech, the current leader, which has an existing capacity of 192.26 million tonnes per annum, is expected to reach over 225 million tonnes by the same period. While Ambuja is unlikely to overtake UltraTech in absolute size in the near term, the gap is set to narrow steadily. With an existing market share of about 16.6 percent, Ambuja is positioning itself as the only credible challenger with comparable national scale.
Risks and Constraints
Despite the positives, risks remain. Regulatory and shareholder approvals could stretch timelines, and organisational changes may temporarily disrupt execution. Moreover, a portion of operational integration has already been undertaken, limiting the scope for incremental gains. Industry-wide challenges such as weak cement pricing, sluggish demand growth, and intense competition could also cap margin expansion. Even with synergies, EBITDA per tonne is expected to grow at a measured pace, with analyst ICICI Securities estimating a 12 percent CAGR through FY28.
The consolidation of Adani Group’s cement assets under Ambuja is a strategic move that strengthens scale, improves efficiency, and enhances long-term competitiveness. While it meaningfully improves Ambuja’s ability to challenge UltraTech, leadership of India’s cement industry will depend on consistent execution, disciplined capital deployment, and favourable industry conditions. For now, the merger lays a solid foundation but the race for cement supremacy is far from over.
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