The acquisition put Adani in direct competition with Ultratech Cement. (Photo: Bloomberg)
After Adani Group acquired ACC and Ambuja Cement, its EBITDA has increased from Rs 350 to Rs 1,350 per tonne and the group aims to scale it up to Rs 1,400 by 2024, sources said.
In a bid to broaden its verticals, Adani Group acquired Ambuja Cement Ltd and ACC Ltd last year. Ambuja Cement has a cement capacity of 31 million tonnes per annum with 6 integrated cement plants and 8 cement grinding units spread across the country. ACC has a cement capacity of 34.45 million tonnes with 17 cement production units and 85 ready-mix concrete plants.
The acquisition put Adani in direct competition with Ultratech Cement, India's largest cement manufacturer. And Adani Group now plans to double its annual cement production capacity by 2027.
Since the acquisition in September 2022, EBITDA per tonne of cement has increased from Rs 350 to Rs 1,350. Company sources said the addition of this will be scaled up to Rs 1,400 per tonne by 2024.
The current EBITDA margin is approximately 20 percent and the intention is to increase it to approximately 25 percent.
Sources said the group aims to reach sales of 120 million tonnes by March 2028. The target is to achieve revenue of Rs 70,000 crore and EBITDA of Rs 17,500 crore. At those levels, EBITDA per tonne will be close to Rs 1,450, which translates to a margin of about 25 percent.
The conglomerate aims to add 70 million tonnes of capacity over the next five years using a highly efficient, modern, energy-efficient milling plant.
The recent acquisition of Sanghi Cement added 6.1 million tons of cement capacity, 6.6 million tons of clinker capacity and 1.1 billion tons of limestone reserves – enough to meet the additional production of 24 million tons of cement per year.
Sources said the group has an investment outlook of around Rs 46,000 crore over the next five years for both organic and inorganic growth in the cement sector.
It will set up greenfield and brownfield projects and debottleneck existing units to unlock and increase capacity without having to make heavy capital investments.
It has already placed orders for capacity expansion projects for 8 million tons of clinker and 19 million tons of cement.
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First print: December 17, 2023 | 5:20 PM IST