Sequential price weakness halves Dalmia Bharat’s Q2 profit despite strong annual growth

Puneet Dalmia-backed Dalmia Bharat Ltd has seen a 39% sequential decline in the company’s profitability. ₹239 crore, although this figure was 387% higher than the previous year period as India’s fourth largest cement producer experienced lower prices in the July-September period.

June quarter profit ₹395 crore, compared to ₹49 million lira in the same period last year.

With an installed capacity of 49.5 million tonnes (mt), Dalmia Bharat’s revenue from operations decreased by 6% compared to the previous quarter. ₹3,417 crore. June quarter revenues were as follows: ₹3,636 crore. Revenue from operations increased by 10.7% compared to last year.

Also Read | Dalmia Bharat is in a good spot when it comes to pricing, but will demand move along?

UltraTech, India’s largest cement producer, will announce its results on Saturday.

Delhi-based Dalmia Bharat’s sales volume decreased by 1.9% to 6.9 million tonnes (mt) compared to the April-June period when sales volume reached 7 million tonnes. Six-month sales volume also decreased by 1.7% to 13.9 million tons.

Cash flow from operating activities ₹836 crore.

Earnings before interest, taxes, depreciation and amortization (EBITDA) ₹696 crore, a 21.2% decline from the previous quarter. EBITDA in the June quarter, ₹883 crore. EBITDA/ton was: ₹1,013. EBITDA margins decreased to 20.4% sequentially.

Also Read | Dalmia Bharat has a long way to go to achieve pan-India presence

Dharmender Tuteja, chief financial officer (CFO) of Dalmia Bharat, said in a statement that the company’s “revenue increased by 11% year on year, while EBITDA increased by 60% on the back of healthy cement realisations”.

Net debt to EBITDA stood at 0.56x, while gross debt stood at approx. ₹6,621 crore.

The company announced that it will distribute temporary dividends ₹4 per share.

Dalmia Bharat said it started trial runs on its 3.6 million tonne clinker line at Umrangso, Assam, in September. Commercial production is expected by December 2025.

Construction work for expansion of the unit is also ongoing in Belgaum, Karnataka.

Dalmia Bharat also commissioned 93 MW of renewable energy (RE) capacity, increasing its operational renewable energy capacity to 387 MW. The share of renewable energy consumption is 48.1%, the company stated in a press release.

Also Read | Dalmia Bharat faces tough terrain, industry faces negative prospects

GST reduction, capacity plans

According to Managing Director (MD) and Chief Executive Officer (CEO) Puneet Dalmia, Dalmia Bharat announced that the reduction in goods and services tax (GST) rates on cement from 28% to 18% is a “long-awaited financial aid”. “We remain focused on building scale and delivering profitable growth,” he said.

In a presentation to investors, Dalmia Bharat reiterated plans to increase capacity to 75 million tonnes by fiscal 2028 (FY28). Its current capacity is 49.5 mt. The first expansion will be carried out with additions of 3 mt each in Belgaum and Pune. Another 6 mt is expected to come up in Kadapa, Andhra Pradesh.