Adani Cement Targets 140 MTPA by 2028 with Expansion and Acquisitions in South & North-East India

Adani Cement is actively exploring acquisition opportunities in South and North-East India as part of its expansion strategy. The company is conducting due diligence on at least two South India-based cement firms while also considering a bid for Jaypee Cement, which is currently undergoing insolvency proceedings under Jaiprakash Associates. As per The Hindu Business Line, sources indicate that the company is targeting cement producers with capacities ranging between 5 - 10 million tonnes per annum (mtpa). Initial discussions with a mid-sized entity in the South have not progressed as expected.

The company’s expansion plans involve leveraging acquisitions primarily through Ambuja ACC, with around $1.5 billion in free cash earmarked for deals in South India and the North-East. The approach is reportedly aggressive, focusing on complete acquisitions with full cash transactions.

Adani Cement has been generating annual cash flows of approximately $800 million to $1 billion. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) per tonne have increased from ₹350 to ₹1,400, with a goal of reaching ₹1,600 per tonne by 2027. As part of a broader expansion strategy, Adani Group has also announced a $3 billion fund for acquisitions in both the ports and cement sectors.

Much of the company’s growth in the cement segment is expected to come through acquisitions rather than greenfield expansions. Adani Cement aims to reach a total capacity of 140 mtpa by 2028. With the recent acquisition of Orient Cement, its total capacity is projected to reach approximately 97 mtpa. The company expects to close FY25 with 100 mtpa capacity, increasing to 118 mtpa in FY26.

Market dynamics in South India differ significantly from those in other regions. The southern market primarily relies on ordinary Portland cement (OPC), while Ambuja ACC has a higher share of blended cement sales, which cater mainly to trade segments. Blended cement combines OPC with supplementary materials like slag, fly ash, and silica, offering higher durability. However, OPC remains dominant in South India due to its affordability and widespread use in business-to-business (B2B) applications, particularly in cities like Bengaluru, Hyderabad, and Chennai. Market conditions in the South are described as highly competitive, with pricing pressures affecting overall profitability.

Adani Cement has already undertaken multiple acquisitions. In June 2024, the company acquired Penna Cement for over ₹10,000 crore. In October, Ambuja Cements entered into a binding agreement to acquire a 46.8% stake in Orient Cement, valuing the deal at ₹8,100 crore. A two-stage acquisition process is currently underway. Additionally, Adani Cement is in the process of merging entities, including Penna Cements, Adani Cementation, and Sanghi Industries. The merger is expected to be completed in the next financial year.

The company’s expansion strategy underscores its intent to strengthen its foothold in key regional markets while increasing production capacity through acquisitions. With a focus on high-growth markets in South and North-East India, Adani Cement is positioning itself to become a dominant player in the industry.

However, challenges remain, particularly in competitive pricing dynamics and the successful integration of acquired businesses. The coming years will be crucial in determining the effectiveness of the company’s aggressive acquisition-led strategy in achieving its long-term growth objectives.

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