Andhra Cements Ltd Q2FY26 – From Graveyard to Grinder: ₹931 Cr Debt, 12× P/B, and a 6-Stage Preheater Hotter Than the Promoter’s Pledge
1. At a Glance
Once upon a time, in the dusty cement plains of Guntur, a company named Andhra Cements Ltd (ACL) was clinically dead. Plants shut since 2020, auditors gone silent, creditors crying harder than retail investors in a penny stock. Then came Sagar Cements Ltd, doing a full-blown phoenix act in 2023 — infused ₹322 Cr, revived operations, and declared “Let there be clinker!”
Fast-forward to Q2 FY26:
Market Cap: ₹710 Cr
CMP: ₹76.3
3-Month Return: +9.36% (that’s optimism or short covering, we’ll never know)
Book Value: ₹8.27 (meaning: price is 9.2× book, a premium usually reserved for FMCG royalty, not a company with negative profits)
ROE: -68.4% — yes, you read that right, it’s losing money faster than cement sets.
Debt: ₹931 Cr, Debt/Equity 12.2×, because financial leverage is their favourite construction material.
PAT (Q2): -₹41.9 Cr on revenue ₹77.8 Cr.
This company’s story is like an Ekta Kapoor reboot — old, dramatic, resurrected, and still not profitable. Let’s find out why cement is the only solid thing here.
2. Introduction – The Resurrection of a Cement Zombie
Remember the good old days when every district had a cement company and every cement company had an excuse? Andhra Cements was one of them. Born in 1936, it survived wars, elections, and multiple promoters — but not the great debt avalanche of the 2010s.
By 2020, both its plants — Sri Durga (Dachepalli) and Visaka Cement Works — were shut. The Dachepalli unit gathered dust; the Visaka plant sat inside city limits where even trucks refused to visit.
Enter 2023, CIRP special. The NCLT gave it a lifeline via Sagar Cements Ltd, which acquired 95% stake and promised to pump cash, oxygen, and corporate governance. They even restarted the Dachepalli unit in April 2023.
Now it’s 2025. The preheater system is working overtime, clinker capacity expanded from 1.85 MTPA → 2.3 MTPA, grinding from 2.25 → 3 MTPA, and the company just announced a new 6-stage preheater commissioning on 23 Oct 2025 — the only “hot” thing about this company so far.
But profitability? Still under construction.
3. Business Model – WTF Do They Even Do?
You guessed it — they make cement. But not the kind that holds up skyscrapers of EBITDA.
Andhra Cements manufactures and sells cement and clinker under the Durga Cement and Visaka Cement brands (ironically, both names now refer to “past glory”).
Their operations revolve around:
Clinker production at Dachepalli.
Grinding and bagging operations.
Sales through dealers in Andhra Pradesh and Telangana.
Since the revival, management has focused on restoring plant utilisation, improving thermal efficiency, and leveraging parent Sagar Cements’ supply chain.
Sounds neat? Wait till you read the footnotes. Despite all that effort, FY25 margins were -3.4% OPM, and losses continue every quarter.
Essentially, this is a turnaround story still searching for the turn.
