Andhra Cements Ltd Q1 FY26: ₹100 Cr Sales, ₹-30 Cr Loss, Debt-to-Equity 5.2x – Cementing Red Ink Since 1936
1. At a Glance
Andhra Cements Ltd, one of India’s oldest cement companies, has been through more drama than a daily soap. After being in coma from 2020 to 2023 (plants shut, creditors knocking), it was revived by Sagar Cements through NCLT. Fast-forward to Q1 FY26: sales ₹100 Cr, losses ₹30 Cr, and ROE at a Titanic-sinking -68%. The stock has doubled in 3 years but fundamentals still scream: “construction dust, no cement strength.”
2. Introduction
Andhra Cements is that old uncle in the cement industry – born in 1936, lived through independence, green revolution, and multiple governments, but now needs a bailout every decade.
The company literally stopped making cement for 3 years (Feb 2020 to Mar 2023). Imagine a mithai shop that doesn’t make mithai – that’s Andhra Cements. In April 2023, operations resumed at Dachepalli, courtesy Sagar Cements’ resolution plan and ₹322 Cr equity infusion.
But just when investors thought it was reborn like a phoenix, the Q1 FY26 numbers came with reality check: sales up 57% YoY to ₹100 Cr, but losses deep at ₹30 Cr. OPM at a healthy negative 5.5%. Debt-to-equity at 5.2x ensures more sleepless nights than engineering viva exams.
So yes, Andhra is alive, but “healthy” is still a stretch.
3. Business Model – WTF Do They Even Do?
Simple. They make cement. But execution is as complicated as a family WhatsApp group fight.
Plants:
Sri Durga Cement Works (Dachepalli, Guntur): 1.85 MTPA clinker, 2.25 MTPA grinding capacity. Recommenced April 2023.
Visaka Cement Works (Visakhapatnam): Shut since FY23. Reason? It’s literally inside city limits, so logistics nightmare + pollution = “closed until further notice.”
Revenue breakup FY23: 96% cement/clinker sales, 1% other income, 3% from selling scrap/plant parts (when you sell machines for profit, you know business isn’t smooth).
Capex Plan (Jan 2024): Expand Dachepalli – clinker from 1.85 → 2.3 MTPA, grinding 2.25 → 3.0 MTPA. Cost: ₹4,707 Cr (no typo, that’s 4-digits crore). Funded through internal accruals + debt. Because what better way to fix losses than adding more debt?
Fundraise: March 2024 board approved ₹180 Cr rights issue, partly to reduce promoter stake to 75% (public shareholding norms) and partly to keep lights on.
Basically, they sell cement when plants work, raise debt when they don’t, and hope Sagar Cements keeps paying the electricity bill.
👉 Question for readers: Would you trust a cement company that once stopped making cement for 3 years? Or is that the corporate version of “Netflix subscription paused”?
