Dalmia Bharat’s profit jumps, flags war-led cost pressures

Dalmia Bharat Ltd, the country’s fourth-largest cement maker by capacity, reported a sharp rise in quarterly and annual profits but signaled cost pressures that began rising in March due to conflict in West Asia and spread into the June quarter.

The company said it hoped price increases introduced in April would offset cost increases without immediately impacting demand or margins.

For the financial year ending March 31, 2026 (FY26), the company’s net profit increased by more than 65%. ₹1,158 crore due to better realizations and moderate increase in costs. It affected your profit ₹337 crore deferred tax expense. Net profit is ₹699 crore in FY25.

Revenue from operations increased approximately 6% ₹14,804 crore in FY26, while volume growth remained muted, rising 2% to 30 million tonnes (MT).

“Price increases in April were made to reflect cost increase,” managing director and CEO Puneet Dalmia said during the post-earnings call, but did not specify the amount of the increases. “We are optimistic that the positive movement in prices will maintain and offset any increase in costs. Demand remains solid in April. However, it is too early to tell at this time. Typically, we will understand the impact of inflationary pressures on demand in the second half of FY27.”

Dalmia Bharat reported a better March quarter but warned of cost pressures as conflict in West Asia increased fuel and freight costs due to energy shocks and Hormuz route risks.

The company’s net profit more than tripled ₹394 crore in March quarter ₹128 crore in the previous three months, supported by strengthening demand and rising prices in key eastern and southern markets.

Revenues increased by 21% sequentially ₹4,245 crore, driven by a 21% increase in sales volumes from 7.3 million tonnes in the December quarter to 8.8 million tonnes.

However, costs rose above 14%. ₹3,840 crore reflecting persistent input cost inflation. Electricity and fuel costs rose 7% in the March quarter, while freight rates rose 20% in the three months to December.

The company expects costs to increase ₹125-150 per tonne during the April-June period and during the March quarter due to an increase in fuel and energy, logistics and packaging expenses. Alternative supply chain arrangements are being made.

Dalmia Bharat joins UltraTech Cement, the country’s largest cement producer, to address war-related cost pressures.

UltraTech Cement on Monday reported its highest-ever annual profit in FY26, helped by strong demand offsetting higher costs caused by conflict in West Asia. The company announced net profit ₹8,165.64 crore for the year, a 35% increase compared to last year. This was even as costs increased, with fuel and energy expenditures increasing by 6% and freight costs by 10%. Rising fuel, packaging and shipping costs are causing problems, the company said. He also warned that if global crude oil prices rise, gasoline and diesel prices may rise further.

Other major cement companies like Adani Group and Shree Cement are yet to announce their results.

Raghav Maheshwari, research analyst at brokerage firm Equirus Securities, said in an April 28 note that Dalmia Bharat reported a mixed performance with volumes throttling, but profitability was better with lower cost. “We expect Dalmiya to report better growth as macros and demand outlook improve, fueled by increased capacity commissioning and higher economic and infrastructure activity growth.”

Maheshwari stated that the costs of petcoke and packaging bags used as fuel in cement production are a “problem” for the sector, which could affect profitability unless there are price increases. “Although rising petcoke and packaging bag costs will continue to be a burden for the industry in the near term, it could impact profitability unless price increases.”

Dalmia Bharat outlines a spending plan ₹3,200–3,400 crore for FY27. This, ₹Finance chief Dharmender Tuteja said Rs 2,200 crore will be spent to increase the capacity from 49.5 million tonnes to 55.5 million tonnes.

“We are on track to achieve 75 MT capacity by FY28. Other capex details will be announced as we progress,” he said during the earnings call.

The capacity expansion for this financial year includes new units in Belgaum and Pune aimed at strengthening its presence in western and southern markets; The company aims to benefit from the recovery in regional demand.