Andhra Cements Limited (NSE: ACL | BSE: 532141)

Source: Andhra Cements Limited Annual Report FY 2025-26 (Fiscal Year Ended March 31, 2026)

📋 Quick Facts: Company Snapshot

🏢 The Corporate Identity: Who They Are & Where They Came From

The Big Picture

Andhra Cements Limited is an established Indian cement manufacturing entity operating as a subsidiary of Sagar Cements Limited. Incorporated in December 1936, the Company possesses an operating legacy spanning nearly nine decades in the building materials industry. The entity is engaged in the core business of producing and marketing clinker and cement, serving infrastructure, residential, commercial, and industrial construction across regional domestic markets.

During the financial year ended March 31, 2026, the Company scaled up operational activities significantly following the re-commencement of manufacturing operations at its primary integrated plant, Sri Durga Cement Works, in April 2023. The organization is currently undergoing a comprehensive capital expansion and technological modernization program designed to expand its manufacturing footprint, improve energy efficiency, and optimize long-term operational performance.

• Holding Structure: Sagar Cements Limited acquired majority ownership and holds a 75.00% equity stake in the Company as of March 31, 2026.
• Operational Re-ignition: Grinding operations successfully resumed at Sri Durga Cement Works on April 12, 2023, driving operational revenue growth to ₹442.49 Crores in FY 2025-26.
• Capacity Upgrade: Ongoing modernization to expand clinker capacity from 1.65 MTPA to 2.30 MTPA and cement grinding capacity from 1.82 MTPA to 3.00 MTPA.

The Founders, Promoters & Their Legacy

Originally incorporated in 1936 in pre-independence India, Andhra Cements Limited represents one of the historical pioneers of cement manufacturing in Southern India. Over the decades, the Company navigated multiple corporate restructuring phases, culminating in its acquisition by Sagar Cements Limited via a Corporate Insolvency Resolution Process (CIRP) framework. Following resolution plan implementation, Sagar Cements Limited established corporate control as the sole promoter entity.

Under the leadership of Sagar Cements Limited, the managerial framework of Andhra Cements Limited was restructured to align operational processes, treasury oversight, and strategic direction with the broader promoter group. The leadership structure combines independent industry professionals with seasoned corporate executives from the promoter parent, ensuring strict standards of governance and strategic alignment across plant modernization initiatives.

The Journey: History & Evolution

The operational trajectory of Andhra Cements Limited spans several historic stages—from an early regional producer to undergoing financial restructuring, and subsequently entering a turnaround phase under Sagar Cements Limited. Prior to acquisition, plant operations faced prolonged downtime due to liquidity constraints. The resolution plan led to capital reduction, debt extinguishment, and targeted capital injection to revive manufacturing operations.

The key evolutionary milestone in the recent period was the official recommencement of plant and grinding operations at Sri Durga Cement Works on April 12, 2023. Following operational stabilization in FY 2023-24 and FY 2024-25, the Board of Directors approved a major expansion and modernization scheme on January 24, 2024, involving an estimated capital outlay of ₹470.69 Crores to scale clinker and cement manufacturing capabilities.

The Corporate Umbrella

Andhra Cements Limited operates as a standalone operating entity under its holding company, Sagar Cements Limited. The Company does not hold equity interests in any subsidiary, associate, or joint venture entities. Consequently, all financial statements reported by the Company are standalone in nature, reflecting its direct manufacturing, commercial, and financial activities.

Through its parent entity Sagar Cements Limited, the Company benefits from operational synergies, raw material procurement economies of scale, group treasury support, and centralized administrative expertise, enabling it to execute large-scale capital projects while managing working capital needs.

⚙️ The Business Engine: What They Do & Where They Operate

The Core Divisions

The operational framework of Andhra Cements Limited is organized around a single reportable operating segment: the manufacture and sale of cement and clinker. Operating performance is monitored on an integrated basis by the Chief Operating Decision Maker (CODM).

The Product & Service Catalog

The commercial output of Andhra Cements Limited consists of primary building materials supplied to retail builders, institutional developers, infrastructure contractors, and industrial projects across regional domestic markets:

• Ordinary Portland Cement (OPC): High-grade structural cement formulated for heavy-duty concrete applications, high-rise building framing, pre-cast structures, and civil engineering infrastructure.
• Portland Pozzolana Cement (PPC): Blended cement incorporating high-quality fly ash, offering enhanced durability, low heat of hydration, and resistance to aggressive chemical environments; widely utilized in housing construction and general masonry.
• Clinker: Intermediate fused limestone product produced via high-temperature rotary kilns, distributed to grinding units or parent facilities for final cement blending.

The Names You Know

Commercial output is marketed under the established brand portfolio of Andhra Cements Limited and its parent company Sagar Cements Limited, serving dealer networks, institutional buyers, and ready-mix concrete manufacturers across Southern and Central India.

Mapping the Domestic & Global Reach

The entire commercial sales volume of Andhra Cements Limited is distributed within the domestic Indian market. The Company did not record any export revenue during the financial year ended March 31, 2026.

The Brick & Mortar Footprint

The industrial architecture of Andhra Cements Limited is based on two strategic manufacturing assets situated in the state of Andhra Pradesh:

• Sri Durga Cement Works (SDCW): Located at Sri Durgapuram, Dachepalli Mandal, Palnadu District, Andhra Pradesh. SDCW functions as the main integrated manufacturing hub of the Company, housing limestone mining reserves, raw material processing facilities, a rotary kiln, a newly commissioned 6-stage preheater, and cement grinding mills.
• Visaka Cement Works (VCW): Located at Parlupalem Village, Durganagar Post, Visakhapatnam, Andhra Pradesh. Production operations at VCW are currently suspended as the plant location falls within urban city limits, presenting operational and environmental challenges.

📊 The Financial Health: The Numbers Simplified

Multi-Year Financial Highlights

A multi-year tracking of key operational metrics highlights the financial progression following the plant recommencement in April 2023 and the implementation of ongoing modernization projects.

Earnings, Expenses, & Take-Home Profits

The Statement of Profit and Loss outlines operational progress, featuring a 61.46% expansion in top-line revenue driven by increased grinding operations at Sri Durga Cement Works. The Company generated positive operating EBITDA of ₹2,596 in Crores compared to an operating loss of ₹2,176 in Crores in the prior fiscal year.

The cost structure shows substantial power and fuel expenditure (₹177.83 Crores) alongside freight and forwarding charges (₹99.29 Crores), reflecting the energy-intensive nature of cement manufacturing and logistics. Finance costs increased to ₹97.99 Crores due to capital drawdowns for project expansion. Deferred tax assets remeasurement under Section 115BAA provided a tax credit of ₹89.32 Crores, reducing net loss to ₹67.16 Crores.

Assets, Borrowings, & Net Worth

The Balance Sheet illustrates asset expansion stemming from fixed asset creation under the ongoing modernization scheme. Total non-current assets grew to ₹1,23,073 in Crores, primarily reflecting Property, Plant and Equipment of ₹95,941 in Crores.

Non-current debt expanded to ₹1,012.16 Crores, comprising long-term loans from consortium banks (State Bank of India, Union Bank of India, Yes Bank Ltd) and unsecured promoter loans from Sagar Cements Limited and related entities. Net current liabilities stood at ₹95.21 Crores as of March 31, 2026, with current liabilities of ₹284.54 Crores exceeding current assets of ₹189.33 Crores.

Cash Flow: Tracking the Money Movement

Cash flow dynamics reflect substantial financing drawdowns directed into capital expenditure for the modernization of Sri Durga Cement Works.

Funding the Future: CapEx, CWIP & R&D Spending

The Company is executing a comprehensive modernization and capacity expansion project at Sri Durga Cement Works, Dachepalli, with an estimated total expenditure of ₹470.69 Crores. Key elements of this capital scheme include:

• Preheater Modernization: Replaced the old 4/5-stage preheater with an efficient 6-stage preheater equipped with an inline calciner, commissioned on October 23, 2025.
• Clinker & Grinding Expansion: Elevating clinker capacity from 1.65 MTPA to 2.30 MTPA and cement grinding capacity from 1.82 MTPA to 3.00 MTPA. Civil construction of the new Cement Mill building is scheduled for completion by May 2026, with target project completion by September 2026.
• Energy Conservation Investments: Invested ₹1.25 Crores directly in energy conservation equipment, including VFD installations on main critical motors.

🗺️ The Corporate Family Tree: Structure & Investments

Subsidiaries, Associates, & Joint Ventures (Form AOC-1)

Andhra Cements Limited has no subsidiaries, associate entities, or joint ventures. Accordingly, no disclosures under Form AOC-1 are applicable.

Strategic Investments & Treasury Holdings

The Company holds no third-party strategic equity investments or treasury equity holdings. Non-current financial assets are limited to bank security deposits, margin money deposits, and financial guarantees extended by the parent entity, Sagar Cements Limited.

👥 Power & Control: Who Pulls the Strings?

The Brain Trust: Board of Directors & Key Managerial Personnel (KMP)

The governance structure of Andhra Cements Limited comprises seven directors and key executive officers managing operations, accounting, and compliance functions.

Who Owns the Stock? Shareholding Pattern

The total issued, subscribed, and paid-up equity share capital of Andhra Cements Limited stands at ₹92.17 Crores, comprising 9,21,72,140 equity shares of face value ₹10 each. The shareholding structure as of March 31, 2026 is detailed below:

🎯 The Strategic Outlook: Future Plans & Potential Pitfalls

Competitive Advantages & Economic Moats

Andhra Cements Limited possesses distinct operational assets and structural advantages that support its ongoing turnaround and integration with Sagar Cements Limited:

• Captive Raw Material Security: High-grade captive limestone mining leases adjacent to the Sri Durga Cement Works facility in Palnadu District provide long-term mineral security and minimize raw material procurement freight.
• Integrated Parent Synergies: Absolute operational alignment with Sagar Cements Limited enables bulk purchasing of fuel (coal/petcoke), shared distribution channels, and unified technical supervision.
• Modernized Calcination Technology: Commissioning of the 6-stage preheater system improves thermal efficiency, lowers specific heat consumption per metric ton of clinker, and enhances plant margins.

What Could Go Wrong? Key Challenges & Business Risks

The Company faces several financial and operating risk factors disclosed in the audit and management analysis reports:

• Net Current Liability Position: As of March 31, 2026, current liabilities exceeded current assets by ₹95.21 Crores, creating liquidity pressures managed via unconditional financial support letters and guarantees from Sagar Cements Limited.
• Fuel & Input Price Volatility: Heavy reliance on thermal coal and petroleum coke exposes operating margins to international energy price movements and freight fluctuations.
• Urban Constraints at Visaka Unit: Production operations at Visaka Cement Works remain suspended due to urban expansion in Visakhapatnam, limiting geographical operating flexibility to the Sri Durga facility.

The Next Chapter: Growth & CapEx Initiatives

Management remains focused on executing the remaining phase of the ₹470.69 Crores capital modernization program. Key structural objectives targeted for completion by September 2026 include:

• Grinding Capacity Scaling: Completing civil works, building structure, and equipment commissioning for the new Cement Mill to reach a total grinding capacity of 3.00 MTPA.
• Alternative Fuel & Raw Material (AFR) Usage: Implementing thermal substitution rate (TSR) projects to co-process alternative waste fuels in the pyro-processing kiln during FY 2026-27.
• Amalgamation Evaluation: The Board of Directors on March 30, 2026 granted in-principle approval for a proposed corporate merger of Andhra Cements Limited into its parent company, Sagar Cements Limited, subject to regulatory, statutory, and judicial approvals under Sections 230 and 232 of the Companies Act, 2013.

The Verdict: Strategic Outlook & Conclusion

Andhra Cements Limited has established operational stability following the recommencement of manufacturing at Sri Durga Cement Works and the commissioning of its upgraded 6-stage preheater. Supported by the capital, operational guarantees, and strategic direction of parent entity Sagar Cements Limited, the ongoing expansion to 3.00 MTPA grinding capacity positions the organization to enhance operational throughput, capture regional infrastructure demand, and integrate fully into the broader corporate parent framework.

Note: Financial ratios, margins, YoY growth percentages, and % revenue shares are calculated by IndianCompanies.in based on disclosed Ind AS financial statements.

Official Site: https://www.andhracements.com