Internal accruals to fund Adani cement expansion
Cement

Internal accruals to fund Adani cement expansion

Adani Group is not seeking external funding to double the manufacturing capacity of its cement firms, Ambuja Cements and ACC, to 140 million tonne by FY28, citing "sufficient" internal accruals. Furthermore, the group has outlined a cost-cutting strategy to achieve its goal of becoming the country's most profitable cement manufacturer.

"The group is not halting cement company expansion, nor does it have plans to raise external debt or equity, and its FY28 vision remains on track." The cement companies' expansion plans are on track, and the group intends to fund them through internal accruals; the first phase is expected to begin soon," according to a source close to the development

Ambuja Cements and ACC have had an average cash and cash equivalent of 8,394 crore and a net cash flow from operations of 3,194 crore over the last six years. The companies' cash and cash equivalent stood at 9,454 crore for the fiscal year ended December 2022, an increase from 5,874 crore in calendar year 2017, but a decrease from 11,358 crore in 2021.

In 2022, the companies reported a negative net cash flow from operating activities of 836 crore, down from 5,309 crore in 2021 and 3,416 crore in 2017.

Following its acquisition of the cement firms in September of last year, Adani Group announced plans to double cement production capacity to 140 million tonne over the next five years and become the country's most profitable manufacturer. While the group did not provide investment figures, analysts estimated a 46,000 crore investment for the expansion plans.

Adani Group, which has been holding road shows in Singapore, Hong Kong, and the United Kingdom, has also informed investors that the cement firms' first phase of expansion has begun. In FY24, the company has budgeted 7,000 crore for capex under phase-I, which includes increasing cement grinding capacity by 11 MT and clinker integrated unit capacity by 12.75 MT.

The cement companies' cost-cutting initiatives include optimising manufacturing, logistics, and other overhead costs, which could save up to $400 per tonne.

It also informed investors that Adani Group's Ebitda for FY23 will be around 61,200 crore, with Adani Cement contributing 7%. (Ambuja Cements and ACC). Adani Cement's Ebitda per tonne increased to 829 per tonne in the December quarter, up from 340 per tonne in the previous quarter.

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Adani Group is not seeking external funding to double the manufacturing capacity of its cement firms, Ambuja Cements and ACC, to 140 million tonne by FY28, citing sufficient internal accruals. Furthermore, the group has outlined a cost-cutting strategy to achieve its goal of becoming the country's most profitable cement manufacturer. The group is not halting cement company expansion, nor does it have plans to raise external debt or equity, and its FY28 vision remains on track. The cement companies' expansion plans are on track, and the group intends to fund them through internal accruals; the first phase is expected to begin soon, according to a source close to the development Ambuja Cements and ACC have had an average cash and cash equivalent of 8,394 crore and a net cash flow from operations of 3,194 crore over the last six years. The companies' cash and cash equivalent stood at 9,454 crore for the fiscal year ended December 2022, an increase from 5,874 crore in calendar year 2017, but a decrease from 11,358 crore in 2021. In 2022, the companies reported a negative net cash flow from operating activities of 836 crore, down from 5,309 crore in 2021 and 3,416 crore in 2017. Following its acquisition of the cement firms in September of last year, Adani Group announced plans to double cement production capacity to 140 million tonne over the next five years and become the country's most profitable manufacturer. While the group did not provide investment figures, analysts estimated a 46,000 crore investment for the expansion plans. Adani Group, which has been holding road shows in Singapore, Hong Kong, and the United Kingdom, has also informed investors that the cement firms' first phase of expansion has begun. In FY24, the company has budgeted 7,000 crore for capex under phase-I, which includes increasing cement grinding capacity by 11 MT and clinker integrated unit capacity by 12.75 MT. The cement companies' cost-cutting initiatives include optimising manufacturing, logistics, and other overhead costs, which could save up to $400 per tonne. It also informed investors that Adani Group's Ebitda for FY23 will be around 61,200 crore, with Adani Cement contributing 7%. (Ambuja Cements and ACC). Adani Cement's Ebitda per tonne increased to 829 per tonne in the December quarter, up from 340 per tonne in the previous quarter. Also Read Railway rake shortage; SAIL gave nod to import wagon wheels UltraTech’s sales volume jump 12% in FY23

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