ACC Ltd Q1 FY27 Earnings Call: Guides Rs. 300-350 per Ton Cost Reduction, 155-Million-Tonne Capacity Target

CompoundingAI Research Published July 29, 2026 5 min read

ACC Ltd held its Q1 FY27 earnings call on July 24, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Numbers & Key Metrics

17% YoY consolidated volume growth in Q1 FY 2026-2027; excluding Orient the growth was ~8%, and base capacity growth of ~6% outperformed the industry average of ~3-4% (Segment 3).
Blended EBITDA per tonne of Rs.715 for Q1 FY 2026-2027, with regional variations — South, Center, and East most vulnerable to pricing pressure (Segment 11).
Net worth of Rs.70,000 crores with zero debt as of Q1 FY 2026-2027; CRISIL/CARE AAA stable and A1+ ratings maintained (Segments 10, 2).
Cost per tonne exited Q1 FY 2026-2027 at ~Rs.4,000, down from ~Rs.4,250–4,500 in Q2 FY 2025-2026, with ~Rs.150 in one-off expenses contributing to the ~Rs.250 sequential decline (Segment 8).
One-off costs of ~Rs.150 per ton in Q1 FY 2026-2027 included Rs.125 from branding and repairs, Rs.25–35 from higher freight, and legal costs (Segment 5).

Rs.300–Rs.350 per ton cost reduction guided by March 2027 (exit of FY 2026-2027), with a longer-term target of Rs.3,650 per ton by FY 2027-2028 from a current base of ~Rs.3,800 (Segment 6).
Power cost improvement of Rs.100–Rs.125 per ton targeted via 10–12 unit consumption drop and Rs.1 per unit reduction; target of Rs.4.5 per unit (vs. current Rs.6.1) by FY 2027-2028, with consumption improvement of at least 15 units (Segment 6).
Fuel cost reduction of ~Rs.150 per ton supported by new efficient kilns (Matapara Line 3 commissioned; Maratha in Q1 FY 2026-2027) and lower heat consumption (Segment 6).
Logistics improvement of Rs.150 per ton via BCFC rakes (3–4 rakes delivered per quarter) enabling higher fly ash usage and blended cement (Segment 6).
Raw material cost reduction of Rs.100 per ton anticipated from group synergies on fly ash and logistics (Segment 6).
From FY 2027-2028, management will amortize O&M costs over four quarters to avoid quarterly earnings distortion (Segments 5, 4).

155 million tonnes capacity target by March 2028 (FY 2027-2028), with exit of FY 2026-2027 at 130–132 million tonnes; net capacity at exit of FY 2025-2026 was 115 million tonnes after mothballing two uneconomical units (Segments 12, 13, 5).
Four new kilns (three previously mentioned plus Mundra, each 4 million tonnes clinker) will add 24 million tonnes of grinding units, raising total capacity from ~109–111 to 133–135 million tonnes (Segment 15).
A fifth 4 million tonnes clinker line in Assam (greenfield) was signed with the government; work started, land secured, expected commissioning in 18–24 months (by FY2028 exit) (Segment 15).
Penna clinker unit commissioning expected in February 2027 (Q4 FY2027); Maratha clinker unit in Q1–Q2 FY2027-2028 (Segments 7, 15).
Annual capex guided at ~Rs.10,000 crores (Rs.8,000 growth + Rs.2,000 efficiency) for FY 2026-2027 and FY 2027-2028, with modular adjustments based on asset utilization (Segment 6).
Two old capacities at Sindri and Jamul (total 2 million tonnes) mothballed and removed from operative capacity (Segment 15).

80% utilization target and EBITDA per tonne of ~Rs.1,250–1,300 for all acquired assets by FY27 end, with a longer-term goal of Rs.1,500 per tonne (Segment 10).
Sanghi clinker utilization targeted at 80% by December 2026 (Q3 FY27); cement utilization currently at 65% with further improvement expected (Segment 10).
Debottlenecking capex at Sanghi will increase clinker capacity from 17,500 tpd to 22,500 tpd by June/July 2027 (Q1 FY28) (Segment 10).
Penna's utilization was ~52–55% in December (Q1 FY 2026-2027), with the Krishnapatnam grinding unit expansion from 2 million to 4 million tons expected to drive a sharp jump in utilization (Segment 16).
Acquired assets capacity utilization improved to 58% (vs. 37% YoY), exit December at 65%; target 80% (Segment 2).
Sanghi's low utilization (~50% grinding) attributed to its "island plant" topography, historical flooding/storms, a low-voltage transmission line (now being revamped), and need for debottlenecking/dredging investments — not structural issues (Segment 16).

Q4 FY2027 industry demand growth of ~8% expected by management, with leading players achieving double-digit growth (Segment 15).
Trade and non-trade prices rose in all clusters; non-trade bags increased by Rs.15–20 in South and Rs.5–10 in North, with trade also seeing gains (Segment 8).
Regional EBITDA per ton commentary for Q3 FY 2026-2027: South generally modest, West better (especially Mumbai), East subdued but improved in December, Center completely subdued due to competition, North and West clusters less pressured (Segment 11).
Double-digit volume growth guided over the next two to three years (FY 2027-2028 and beyond), balancing volume and value, prioritizing realization and premium cement sales (Segment 16).
Premium cement volumes at 35% of trade sales, up 31% YoY; trade/non-trade mix shifting to 70:30 (exit December 67:33, January 70:30) (Segment 2).
Management declined to provide explicit EBITDA per tonne guidance for FY 2026-2027, citing positive price momentum but no forward-looking EBITDA (Segment 9).

Rs.315 crore coal sales gross-up at ACC level in Q1 FY 2026-2027, following auditor guidance — no EBITDA or net sales price impact, purely an accounting gross-up; at consolidated level the impact fully eliminates as intra-group (Segment 14).
From FY 2027-2028, plant maintenance costs will be amortized over 12 months rather than booked in the quarter incurred, aimed at avoiding quarterly earnings distortion (Segment 4).
Sequential swing in change in inventory from -Rs.30 crores to -Rs.84 crores reflects seasonal stock buildup in Q2 FY 2026-2027 (a low-sales quarter) for cement and clinker, which typically normalizes in following quarters (Segment 4).
Renewable energy: 898 MW out of 1,122 MW (80%) commissioned but not fully utilized due to pending government approvals; excess power sold to grid, with income recorded under other operating income (Segment 3).