💰 Financial Performance

Revenue Growth by Segment

The company operates in a single business segment (Cement). Revenue was adversely impacted by a decrease in selling prices, leading to a net profit margin decline from -24% in FY24 to -56% in FY25.

Geographic Revenue Split

Not disclosed in available documents, though operations are concentrated around strategically located plants in Andhra Pradesh.

Profitability Margins

Operating Profit Margin (EBITDA/Net Revenue) deteriorated from -2% in FY24 to -8% in FY25. Net Profit Margin fell significantly from -24% to -56% over the same period due to lower realizations.

EBITDA Margin

EBITDA margin stood at -8% for FY25, a 600 bps decline from -2% in FY24, driven by adverse selling prices and increased fuel/power costs.

Capital Expenditure

Historical capital expenditure for H1 FY26 was INR 124.42 Cr, compared to INR 38.93 Cr in H1 FY25, representing a 219% increase in investment in property, plant, and equipment.

Credit Rating & Borrowing

Not disclosed; however, finance costs increased by 14.7% YoY to INR 41.45 Cr in H1 FY26. Non-current borrowings stood at INR 833.13 Cr as of September 30, 2025.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include limestone, coal, gypsum, and fly ash. Fuel and power costs are major drivers, with significant impacts from regulatory true-up orders.

Capacity Expansion

Current capacity not specified in MTPA; however, the company employs 175 personnel at its cement plant and administrative office. Expansion is targeted through technological innovation and entering new geographies.

Raw Material Costs

Raw material and power costs were impacted by APERC true-up orders issued in October and November 2024 to recover fuel and power costs, leading to exceptional debits in the profit and loss statement.

Manufacturing Efficiency

The company is focusing on technological innovation to improve operational efficiency; however, specific capacity utilization percentages were not disclosed.

Logistics & Distribution

Not disclosed; however, the company notes that strategically located plants help optimize distribution costs.

📈 Strategic Growth

Growth Strategy

Growth is pursued through expansion into new geographies, leveraging strategically located plants for cost optimization, and technological innovations to enhance operational efficiency. The company is also divesting unused land parcels (INR 8.15 Cr) to streamline the balance sheet.

Products & Services

Cement bags sold under the Andhra Cements brand.

Brand Portfolio

Andhra Cements.

Market Expansion

The company plans to facilitate expansion into new geographies using its strategically located manufacturing base.

Strategic Alliances

ACL is a subsidiary of Sagar Cements Limited. It also has significant transactions with RV Consulting Services Private Limited (Promoter Group).

🌍 External Factors

Industry Trends

The Indian cement industry is shifting toward sustainable development and technological innovation. ACL is positioning itself to capitalize on these opportunities to remain a preferred brand.

Competitive Landscape

The industry is affected by global and domestic demand-supply dynamics; specific competitor market shares were not provided.

Competitive Moat

The moat is based on strategically located plants that optimize logistics and cost structures. Sustainability depends on maintaining operational efficiency amid volatile input costs.

Macro Economic Sensitivity

Highly sensitive to domestic supply-demand conditions and selling price fluctuations in the cement industry.

Geopolitical Risks

Global supply conditions are cited as a factor that could influence operations and selling prices.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to orders from the Andhra Pradesh Electricity Regulatory Commission (APERC) regarding fuel and power cost true-ups, which significantly impact profitability.

Taxation Policy Impact

Not disclosed; the company reported a loss before tax of INR 71.54 Cr for H1 FY26.

Legal Contingencies

The company is dealing with regulatory orders from APERC (dated October and November 2024) for cost recoveries. Specific values for other pending court cases were not disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of cement selling prices, which led to a 3200 bps drop in net profit margin. Debt-equity ratio increased from 2.27 to 5.24, signaling high financial risk.

Geographic Concentration Risk

High concentration in Andhra Pradesh, as evidenced by the impact of state-specific electricity regulatory orders.

Third Party Dependencies

Dependency on the state power grid and regulatory approvals for fuel/power pricing.

Technology Obsolescence Risk

The company is addressing technology risks through innovation to improve operational efficiency.

Credit & Counterparty Risk

Debtors turnover ratio increased from 26 days to 46 days (77% increase), indicating a potential slowdown in receivable collections and increased credit risk.