Ambuja profit jumps on tax credit as operating margin stays weak
Revenue grew 10.38% year on year, but costs rose faster and operating margin remained 5.36 percentage points below the 51-peer sector median.
Filed 04 May 2026, 14:06 IST · Ambuja Cements Ltd (AMBUJACEM)
Key takeaways
- Consolidated net profit rose 44.86% year on year to Rs 1,857.43 cr despite pre-tax profit falling 70.32%, as a -251.7% tax rate created a large tax credit.
- Operating margin fell 5.48 percentage points year on year because expenses grew 17.83% against 10.38% revenue growth, with management citing fuel inflation and supply constraints.
- The stock was down 1.8% five sessions after the results, a smaller move than its 2.35% median absolute reaction across the last eight result events.
Price around the results
Tax credit masks a sharp fall in pre-tax profit
Ambuja Cements reported consolidated net profit growth of 44.86% year on year even as pre-tax profit declined 70.32%. The tax line moved from a 27.95% tax rate in Q4FY25 to a -251.7% rate this quarter, producing a tax credit of Rs 1,329.30 cr. Other income contributed 26.08% of pre-tax profit, so reported net profit was not driven by operating earnings alone.
Fuel and supply pressures cut the annual margin
Revenue grew 10.38% year on year, but expenses rose 17.83%, narrowing operating margin by 5.48 percentage points. Interest expense increased 45.56% and depreciation rose 33.88%, adding to the pressure below operating profit. Management said the quarter was affected by fuel cost inflation, packaging supply constraints and labour migration linked to state elections.
Q4 margin recovered slightly but remains below the FY26 peak
Sequentially, revenue grew 6.22% while expenses rose 5.92%, allowing operating margin to improve 0.24 percentage points. That was only a partial recovery from the sharp decline in Q3FY26: margin remains below the 19.19% recorded in Q2FY26 and the 19.06% in Q1FY26. At 13.41%, it was 5.36 percentage points below the 18.77% median for 51 reported Commodities peers and ranked 13th from the bottom.
Management flags soft demand and expansion milestones
Management said FY27 cement demand growth is expected to remain soft at about 5%, while higher energy prices, inflation and a weaker monsoon are expected to weigh on H1FY27. The company told analysts that ACC and Orient amalgamations are expected to be completed over FY27, subject to approvals. Management also said total capacity is expected to reach 117 MTPA by March 2027 after excluding selectively used Jamul and Sindri capacity.
Initial market reaction was muted, then weakened
The stock rose 0.25% on the results date but was down 2.50% after one session and 1.80% after five sessions. The five-session decline was within the stock's 2.35% median absolute move across its last eight result reactions, which were evenly split between four rises and four falls. The move reached -4.09% after 30 sessions, making the later reaction weaker than the initial response.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹10,915 cr | ₹10,277 cr | +6.22% | +10.38% |
| Other income | ₹138 cr | ₹77 cr | +78.39% | -80.67% |
| Expenses | ₹9,452 cr | ₹8,924 cr | +5.92% | +17.83% |
| Operating profit | ₹1,464 cr | ₹1,353 cr | +8.19% | -21.61% |
| Operating margin (%) | 13.41% | 13.17% | — | — |
| Interest | ₹21 cr | ₹59 cr | -64.66% | +45.56% |
| Depreciation | ₹1,053 cr | ₹959 cr | +9.77% | +33.88% |
| Profit before tax | ₹528 cr | ₹412 cr | +28.06% | -70.32% |
| Tax | ₹-1,329 cr | ₹45 cr | — | — |
| Net profit | ₹1,857 cr | ₹367 cr | +406.15% | +44.86% |
| EPS (₹) | ₹7.41 | ₹0.82 | +803.66% | +90.98% |
Operating margin of 13.41% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.25% | -0.26% |
| Next session | -2.50% | — |
| 5 sessions | -1.80% | -1.04% |
| 15 sessions | -0.51% | — |
| 30 sessions | -4.09% | — |
Volume on the results session was 4.28× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- FY27 cement demand growth is expected to remain soft at about 5%.
- The ACC and Orient amalgamations are expected to be completed over FY27, subject to approvals.
Expansion
- After excluding selectively used Jamul and Sindri capacity, total capacity is expected to be 117 MTPA in March 2027.
Problems & risks
- The quarter was affected by fuel cost inflation, packaging supply constraints and labour migration caused by state elections.
- Higher energy prices, higher inflation and an expected weaker monsoon are headwinds for H1FY27.
- The West Asia conflict is disrupting energy supplies, raising import costs and weighing on trade.
What to watch
- Whether consolidated operating margin recovers from 13.41% after the Q4 cost pressures.
- Whether reported demand trends can be measured against management's FY27 expectation of about 5% growth.
- Progress toward management's stated 117 MTPA capacity target for March 2027.