01 — At a Glance
The Boring, Solid, Structurally Improving Cement Machine
- 52-Week High / Low₹2,123 / ₹1,435
- Q3 FY26 Revenue₹6,483 Cr
- Q3 FY26 PAT₹404 Cr
- Q3 EPS (₹)₹21.52
- Annualised EPS (Q3×4)₹86.08
- Book Value (Latest)₹1,061
- Price to Book1.37x
- Dividend Yield0.52%
- Debt / Equity0.02x
- Q3 Volume (MT)18.9 MT
Auditor’s Opening Note: ACC closed Q3 FY26 with ₹6,483 crore revenue (+8.6% QoQ), ₹404 crore PAT (normalized apple-to-apple comparison shows +258% YoY), and highest-ever quarterly cement sales volume of 18.9 MT. The stock has crashed 23.1% over 12 months. Then on December 22, ACC announced it would merge with Ambuja Cements—its 50% parent owner—in a ~328-share swap ratio. Translation: two cement giants becoming officially one. The math is interesting, the governance is messier, and the long-term value creation could be meaningful. Meanwhile, ROCE sits at 17.4% and Debt-to-Equity at 0.02x. This is a fortress balance sheet playing merger bingo.
02 — Introduction
When Your Parent Company Decides You’re Better Off Merged
ACC Limited is India’s oldest cement company—established 1936, part of the Adani Group since 2022. For most of its modern life, it’s been a 50% subsidiary of Ambuja Cements, which is also a 50% subsidiary of ACC’s current parent company structure. Yes, it’s confusing. That’s by design. Convoluted corporate structures are a desi art form.
Until January 2026, ACC and Ambuja operated as separate listed entities with overlapping boards, shared manufacturing assets, and an MSA (Master Supply Agreement) that let them trade clinker and cement with each other like friendly competitors playing house. Then management decided: why pretend? On December 22, 2025, the board approved an amalgamation scheme where Ambuja would issue 328 shares for every 100 ACC shares held, creating a unified “One Cement Platform” with consolidated capacity of 109 MTPA (growing to 155 MTPA by 2028).
Q3 FY26 delivered the highest quarterly cement sales volume in company history (18.9 MT), revenue of ₹6,483 crore (+8.6% QoQ), and normalized PAT that showed 258% YoY growth when adjusted for exceptional items. The stock reward? Down 23.1% in 12 months. Welcome to the Indian market, where excellent execution gets punished and mergers get celebrated.
Management Concall (Feb 2026): Described Q3 as “decisive and strategically important,” with “volumes at 2x the industry average” and “industry-leading execution.” They also casually mentioned Q3 cost structure was “an aberration” and December exit cost was “below ₹4,000/ton.” Very bullish. Very measured. Very un-Indian, honestly.
03 — Business Model: WTF Do They Even Do?
Cement. It’s Not Exciting But It’s Everywhere.
ACC makes cement. Bags, bulk, RMC (Ready-Mix Concrete), construction chemicals, industrial solutions. The company operates 20 cement manufacturing facilities (11 integrated units + 9 grinding units) with a total installed capacity of 38.55 MTPA standalone—but post-merger with Ambuja, the group touches 107 MTPA (as of Sep 2025). They also run 86+ RMC plants across India.
Revenue split: cement at 94% of sales, RMC at 6%. Channel split: 72% retail, 28% wholesale. The distribution network is 13,000+ channel partners and 39,600 retailers/sub-dealers. In 2024, they supplied 6.6 million tonnes of clinker and cement to Ambuja under an MSA (Master Supply Agreement)—a cosy internal trade arrangement that’ll disappear post-merger. The company has capacity of 38.55 MTPA at 75% utilization (in FY24), and with acquisitions and greenfield projects, is targeting 155 MTPA by 2028.
Cost structure is getting brutal. Management claims they’ve reduced cost/tonne by 14.8% in FY24 via mill automation, energy efficiency, and logistics optimization. Q3 cost/tonne spiked to ~₹4,500 due to brand transition, asset overhauls, equipment failures, and maintenance preponed from Jan/Feb. But December exit was back “below ₹4,000/ton” and management targets ₹3,800/ton by Mar’27.
Installed Capacity38.55 MTPAStandalone (Sep 2025)
Group Capacity109 MTPAPost-Ambuja Merger
FY24 Utilization75%Room to Grow
2028 Target155 MTPAUnified Group
The MSA Edge: Under the Master Supply Agreement, ACC sold 6.6 million tonnes to Ambuja in FY24 at negotiated prices. Post-merger, this internal trade disappears. Watch if consolidated margins improve or if transfer pricing adjustments create accounting noise.
💬 Have you noticed cement prices at your local hardware store? Do they change based on election cycles, monsoons, or just random market paranoia?
04 — Financials Overview
Q3 FY26: The Numbers That Matter
Result type: Quarterly Results | Q3 EPS: ₹21.52 | Annualised EPS (Q3×4): ₹86.08 | TTM EPS: ₹141
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 6,483 | 5,972 | 6,005 | +8.6% | +8.0% |
| Operating Profit | 700 | 1,116 | 846 | -37.3% | -17.2% |
| OPM % | 10.8% | 18.7% | 14.1% | -790 bps | -330 bps |
| PAT (Reported) | 404 | 1,092 | 1,119 | -63.0% | -63.9% |
| PAT (Normalized) | 378 | 147 | N/A | +258% | — |
| EPS (₹) | 21.52 | 58.14 | 59.60 | -63.0% | -63.9% |
The PAT Rollercoaster Explained: Reported PAT fell 63% YoY, but management says this is “distorted by exceptional items.” Q3 FY25 included a big tax refund and other one-offs; Q3 FY26 included brand transition costs, asset overhauls, and equipment failures. Normalized PAT grew 258% YoY. The real story? Revenue +8.6% YoY, volume at all-time high (18.9 MT, +17% YoY), and costs spiked due to one-time items management claims will normalize. Believe at your own risk.
05 — Valuation: Fair Value Range
What’s This Cement Company Actually Worth?
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