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

Puneet Dalmia-promoted Dalmia Bharat Ltd saw a 39% sequential dip in the company's profitability to ₹239 crore, although it was 387% higher than the year-ago period, as India’s fourth-largest cement maker experienced lower prices in the July-September period.

Profit in the June quarter was ₹395 crore, compared to ₹49 crore in the same period last year.

Dalmia Bharat, which has an installed capacity of 49.5 million tonnes (mt), saw revenue from operations dip by 6% over the preceding quarter to ₹3,417 crore. June quarter revenues were at ₹3,636 crore. Income from operations increased by 10.7% compared to last year.

UltraTech, India's largest cement manufacturer, will declare its results on Saturday.

The Delhi-headquartered Dalmia Bharat saw a 1.9% sequential decline in volume to 6.9 million tonnes (mt), compared to the April-June period, during which volume sales reached 7 million tonnes. The half-yearly sales volume also declined by 1.7% to 13.9 million tonnes.

Cash flow from operating activities stood at ₹836 crore.

Earnings before interest, tax, depreciation and amortisation (Ebitda) was at ₹696 crore, a 21.2% decline over the preceding quarter. In the June quarter, Ebitda was ₹883 crore. The Ebitda/tonne was ₹1,013. The Ebitda margins decreased to 20.4% sequentially.

Dharmender Tuteja, chief financial officer (CFO), Dalmia Bharat, in a statement, said that the company saw “revenues improved 11% annually while Ebitda increased by 60% backed by healthy cement realisations.”

Net debt to Ebitda was at 0.56x, with gross debt being around ₹6,621 crore.

The company declared an interim dividend of ₹4 per share.

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

Civil work in Belgaum, Karnataka, for the expansion of the unit, is also underway.

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

GST relief, capacity plans

According to Puneet Dalmia, managing director (MD) & chief executive officer (CEO), Dalmia Bharat, the announced reduction of goods and services tax (GST) rates on cement, from 28% to 18% is a “long-awaited fiscal relief”. “We remain focused on building scale and delivering profitable growth,” he said.

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