Adani Group’s cement arm cuts FY27 capex guidance, prioritises completion of ongoing projects and operational efficiency after facing delays in expansion plans

The company said its immediate focus will be on completing projects already under execution, improving plant efficiency and strengthening operational reliability rather than aggressively launching new projects.

Execution Challenges Prompt Strategic Reset

During a post-earnings investor interaction, Ambuja Cements Director Karan Adani acknowledged that project execution had not matched the standards expected by the Adani Group. He identified contractor inefficiencies, shortage of skilled execution teams and incomplete engineering work as the key reasons behind delays in several expansion projects.

According to Adani, some projects were initiated before detailed engineering and planning work had been fully completed, which later created bottlenecks during execution. To address this, the company has now introduced a new process where engineering preparation will be completed well in advance before any fresh project is launched.

The management believes this correction phase will help improve timelines, reduce operational disruptions and ensure smoother execution in future capacity expansion plans.

Focus Shifts to Completing Existing Projects

The company has clearly indicated that it does not want to overstretch itself with aggressive project announcements at this stage. Instead, the emphasis will remain on finishing ongoing brownfield and greenfield projects already underway across different regions.

Karan Adani stated that Ambuja wants to “pause and correct” its approach before entering another large investment cycle. He also mentioned that while the company continues to evaluate inorganic growth opportunities, organic expansion remains its top priority.

This strategy is expected to improve execution quality and enhance operational efficiencies over the next few quarters.

Maintenance Issues Impact Costs at Acquired Plants

Ambuja Cements CEO Vindo Behety highlighted that several acquired assets, particularly facilities belonging to Penna Cement Industries and Sanghi Industries, required higher-than-expected maintenance expenditure.

The company witnessed operational disruptions and breakdowns at some plants because major repair and maintenance work had been pending for a long time before acquisition. As a result, Ambuja incurred elevated maintenance costs during FY26 to improve plant reliability and operational stability.

Management said these corrective measures may temporarily increase expenses but are necessary to improve long-term productivity and efficiency across the acquired businesses.

Capacity Expansion Plans Remain Intact

Despite the temporary slowdown in capex spending, Ambuja Cements remains committed to its ambitious long-term growth roadmap. The company crossed the 100 million tonnes per annum (MTPA) capacity milestone in FY26 after commissioning new grinding and clinker capacities at multiple locations across India.

Its installed cement capacity currently stands at around 109 MTPA and is expected to rise to nearly 119 MTPA by the end of FY27.

The Adani Group has set a larger target of reaching 140 MTPA capacity by FY28, positioning itself as one of the strongest challengers to market leader UltraTech Cement in the Indian cement sector.

Cement Industry Competition Intensifies

India’s cement industry is witnessing an aggressive expansion phase as leading companies continue investing heavily in capacity creation to benefit from rising infrastructure demand, urbanisation and government-led construction projects.

The Adani Group entered the cement sector in 2022 after acquiring controlling stakes in Ambuja Cements and ACC from Swiss giant Holcim in a deal valued at nearly USD 6.4 billion.

Since then, the group has strengthened its presence through acquisitions including Orient Cement while simultaneously investing in brownfield expansions and operational integration.

Industry experts believe that improved project execution and stronger operational discipline will be crucial for cement manufacturers as competition intensifies and companies race to build scale in the coming years.