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 flagged cost pressures that began building in March due to the West Asia conflict and are spilling into the June quarter.

The company said it hopes that price hikes initiated in April will offset cost increases without immediately impacting demand or margins.

For the financial year ended 31 March 2026 (FY26), the company saw its net profit jump more than 65% to ₹1,158 crore on the back of better realizations and a moderate rise in costs. Its profit was impacted by a ₹337 crore deferred tax charge. Its net profit was ₹699 crore in FY25.

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

“Price hikes were taken in April to pass on the cost increase,” Puneet Dalmia, managing director and chief executive said during the post-earnings call, but did not quantify the hikes. “We are optimistic that positive movement of prices will hold and offset any rise in costs. Demand remains intact in April. However, it is too early to say anything now. 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 the West Asia conflict pushes up fuel and freight costs amid energy shocks and Hormuz route risks.

The company saw its net profit more than triple to ₹394 crore in the March quarter, up from ₹128 crore in the preceding three months, helped by stronger demand in the key eastern and southern markets and improved prices.

Revenue increased 21% sequentially to ₹4,245 crore, on the back of a 21% increase in sales volumes, which rose to 8.8 million tonnes, from 7.3 million tonnes in the December quarter.

However, costs climbed over 14% to ₹3,840 crore, reflecting persistent input cost inflation. Power and fuel costs rose 7% and freight charges were up by 20% in the March quarter over three months through December.

The company expects costs to rise by ₹125–150 per tonne in the April–June period, over the March quarter, driven by higher spending on fuel and power, logistics and packaging. Alternative supply chain arrangements are being made.

Dalmia Bharat joins UltraTech Cement, the country's largest cement maker, in flagging war-related cost pressures.

UltraTech Cement on Monday reported its highest-ever yearly profit in FY26, helped by strong demand that balanced out higher costs caused by the West Asia conflict. The company posted a net profit of ₹8,165.64 crore for the year, up 35% compared to last year. This came even as costs increased, with fuel and power expenses rising 6% and freight costs going up 10%. The company said rising fuel, packaging, and transport costs are a challenge. It also warned that petrol and diesel prices could increase further if global crude oil prices go up.

Other larger cement companies like Adani Group and Shree Cement are yet to declare their results.

In a note dated 28 April, Raghav Maheshwari, research analyst at brokerage firm Equirus Securities, said that Dalmia Bharat reported a mixed performance with volumes being muted, but profitability was better on lower cost. “We expect Dalmia to report better growth going forward on commissioning of incremental capacity and improving macros and demand outlook fuelled by higher economic and infrastructure activity pickup.”

Maheshwari flagged rising petcoke—used as fuel in cement production—and packaging bag costs as an “overhang” for the industry, which could impact profitability in the absence of price hikes. “Though rising petcoke and packaging bags costs remain as an overhang for the industry in near term and may impact profitability in absence of price hikes.”

Dalmia Bharat has outlined an expenditure plan of ₹3,200–3,400 crore for FY27. Of this, ₹2,200 crore will be towards expanding capacity to 55.5 million tonnes, up from 49.5 million tonnes, chief financial officer Dharmender Tuteja said.

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

The capacity expansion for this fiscal includes new units at Belgaum and Pune aimed at strengthening its presence in western and southern markets, as the company looks to capitalize on improving regional demand.