SANGHIIND - Sanghi Industrie

📊 NSE: SANGHIIND 🏢 Cement - North India 📅 Last Updated: 12/14/2025 12:48

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 17% YoY to INR 969 Cr in FY 2024-25, up from INR 828 Cr in FY 2023-24, driven by a 23% increase in sales volumes to 2.19 MT.

Geographic Revenue Split

Primarily focused on the West India market, specifically high-contribution regions like Mumbai and Gujarat, leveraging the Adani Group's national footprint which is targeting 20-22% market share by FY28.

Profitability Margins

Net Profit Ratio improved slightly to -52% in FY 2024-25 from -55% in FY 2023-24. However, the company reported a net loss (PAT) of INR 498 Cr, an 11% increase in loss compared to INR 449 Cr in the previous year.

EBITDA Margin

Operating EBITDA margin turned positive at 11% (INR 106 Cr) in FY 2024-25, a significant recovery from -9% (INR -75 Cr) in FY 2023-24, representing a 20 percentage point improvement.

Capital Expenditure

The parent company (Ambuja Cements) is managing disciplined capex to reach 118 MTPA capacity by FY26 and 155 MTPA by FY28. Sanghi's specific capex is integrated into the group's modernization and digitalization initiatives.

Credit Rating & Borrowing

The company's debt-to-equity ratio increased 117% to 4.06 in FY25. Total borrowing is sourced from the holding company (Ambuja Cements) via preference capital and Inter-Corporate Deposits to support working capital. Parent company Ambuja maintains a CRISIL AAA Stable rating.

⚙️ Operational Drivers

Raw Materials

Key raw materials include fly-ash and alternate fuels used to replace mined resources. Raw material costs for the group were INR 2,833 Cr in H1FY26.

Import Sources

Sourced primarily from domestic locations in Gujarat and West India, with fly-ash sourced from group power plants and alternate fuels integrated into the circular economy model.

Key Suppliers

Major suppliers include Adani Enterprises Limited (AEL), Ambuja Cements Limited (ACL), and ACC Limited under approved Related Party Transactions (RPTs) valid until March 2026.

Capacity Expansion

Current sales volume is 2.19 MTPA. The company is part of the Adani Group's expansion plan to reach 118 MTPA by the end of FY26 and 155 MTPA by FY28.

Raw Material Costs

Inventory turnover ratio increased 8% to 3.06 times in FY25, reflecting an increase in the cost of goods sold as operations ramped up.

Manufacturing Efficiency

Capacity utilization for acquired assets (including Sanghi) is currently 65-67%, with a target to improve as Sanghi swings into a substantial positive zone from Q3 FY26.

Logistics & Distribution

Distribution is optimized through the Adani Group's network of 29,000 dealers and 7 lakh contractors, focusing on high-EBITDA markets like Mumbai.

📈 Strategic Growth

Expected Growth Rate

23%

Growth Strategy

Growth will be achieved through the merger with Ambuja Cements, optimizing capacity utilization from 25% to over 65%, and leveraging Adani Group synergies in logistics and procurement. The company is also integrating AI and digitalization to modernize acquired assets.

Products & Services

Cement bags (Sanghi Cement), clinker, and Ready Mix Concrete (RMC).

Brand Portfolio

Sanghi Cement, Ambuja Cements, ACC, and Orient Cement.

New Products/Services

Ready Mix Concrete (RMC) business is ramping up, now contributing 4.5% to the group's overall revenue.

Market Expansion

Expanding presence in the West India market, particularly Mumbai, to capture high-contribution demand.

Market Share & Ranking

Part of the Adani Group, which is the second-largest cement producer in India, targeting 20-22% market share by FY28.

Strategic Alliances

Master Supply and Service Agreements with Ambuja Cements Limited and Related Party Transactions with Adani Enterprises.

🌍 External Factors

Industry Trends

The cement industry is undergoing rapid consolidation, with the Adani Group targeting 155 MTPA by FY28. Trends include a shift toward RMC and green manufacturing (circular economy).

Competitive Landscape

Intense competition from other major cement players, with Adani Group aggressively acquiring assets like Sanghi, Penna, and Orient to gain market share.

Competitive Moat

Moat is sustained by cost leadership and the Adani Group's integrated logistics (ports, power, and supply chain), providing a durable competitive advantage in the West India market.

Macro Economic Sensitivity

Highly sensitive to GDP growth and infrastructure spending, with demand driven by public and private sector investments.

Consumer Behavior

Shift toward branded cement and Ready Mix Concrete (RMC) for urban infrastructure and housing projects.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by NCLT orders regarding the Scheme of Arrangement and SEBI regulations for Related Party Transactions.

Environmental Compliance

Zero reliance on competing water resources by using rainwater harvesting in mine pits and seawater; integrating fly-ash and alternate fuels for a circular economy.

Taxation Policy Impact

The group reported a one-time tax write-back provision of INR 1,697 Cr in Q2 FY26.

Legal Contingencies

Pending merger petition before the Hon’ble National Company Law Tribunal (NCLT), Ahmedabad Bench, for the Scheme of Arrangement between Sanghi Industries and Ambuja Cements.

⚠️ Risk Analysis

Key Uncertainties

High debt-to-equity ratio of 4.06 and continued net losses (INR 498 Cr in FY25) pose financial risks. Integration of acquired assets and achieving projected capacity utilization are key operational uncertainties.