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Informist, Friday, Jul. 24, 2026

By Eshitva Prakash and Anand JC

MUMBAI – Dalmia Bharat Ltd. expects its sales volumes to grow 7–8% annually in the next two years, similar to its growth expectations for the cement industry as a whole. A capacity boost after the company's integration of the cement business of Jaiprakash Associates, strong diversification plans in East India, and production ramp-up will help Dalmia Bharat achieve its volume goal, the management said in a conference call with analysts.

The management was, however, hopeful that the inorganic contribution from the cement business of Jaiprakash Associates would result in the company posting higher volume growth than the industry. "We are chasing more (volume growth), but at least in line with the industry," a company official said. "And for the additional capacity that we ramped up, I think that should give additional volume... (at) JP (Jaiprakash Associates), we are deeply entrenched in the market so that we get a head start in Belgaum, Kadapa, when the capacities come in."

Speaking of organic volume growth drivers, the company said its expansion project in Belgaum in Karnataka is progressing ahead of schedule and is expected to start commercial production in the next six months. At Kadapa in Andhra Pradesh, site excavation is underway. Excluding acquisition costs, the company incurred capital expenditure of around INR 5.10 billion in the June quarter and expects the capital expenditure for the financial year 2026-27 (Apr-Mar) to be between INR 32 billion and INR 34 billion. Of this, a total of INR 22 billion will be spent on expanding projects and the remainder on maintenance, capital expenditure for recently acquired assets of Jaiprakash Associates, and other projects, the management said.

Dalmia Bharat Friday said it completed the acquisition of the cement undertaking of Jaiprakash Associates and added 5.2 million tonnes per annum cement capacity and 3.3 million tonnes per annum clinker capacity across four plants in Madhya Pradesh and Uttar Pradesh, taking the company's installed cement capacity to 54.7 million tonnes per annum. It had purchased the cement business from the Adani Group for INR 28.50 billion. By FY28, Dalmia Bharat has guided for a total production capacity of 66.7 million tonnes per annum.

For the June quarter, the company reported a consolidated net profit of INR 1.88 billion, down 52% on year and below the Street's view. Its revenue from operations rose nearly 7% to INR 38.90 billion. The company's total expenses rose 13% on year to INR 35.93 billion, largely because of a jump in freight charges and cost of consumed raw materials. The company said it expects input costs to remain elevated in the September quarter amid the war in West Asia. Its management projected an input cost increase of INR 70-INR 80 per tonne in the September quarter unless things turn "drastically bad from here". While input costs are expected to remain high, packaging costs have improved so far in the September quarter, the management said.

The company said realisations improved 6% sequentially for the June quarter and price hikes helped pass on "a significant portion" of input cost inflation to customers. Dalmia Bharat hiked its cement price by around INR 10–INR 15 in South India and INR 15-INR 20 in markets in East India, the management said. Currently, it is facing a "suppression of prices" in West Bengal, but cement prices in South India have risen again.

Its other income for the quarter almost tripled to INR 1.39 billion due to mark-to-market gains on treasury investments. "This (gain) is because of the market yields... (in) quarter four (Jan-Mar), the yields had gone up so we had market losses at that time. Now, market yields corrected in this quarter after the policy announcement and because of the attraction of RBI's (Reserve Bank of India's) measures to attract global capital in the form of FPIs (foreign portfolio investors) and ECBs (external commercial borrowings).

The company's management said it is "encouraged by the speed and efficiency of the integration" of the cement business of Jaiprakash Associates. It expects these acquired assets to make a meaningful contribution to Dalmia Bharat's volumes from the December quarter. Moreover, it expects these assets to be neutral at earnings before interest, tax, depreciation, and amortisation level in a couple of quarters. These assets will have an EBITDA per tonne comparable to a unit of Dalmia Bharat in 7-8 quarters, the management further said.

However, with the addition of these assets to its own balance sheet, the company also expects an increase of around INR 1 billion in depreciation costs for FY27 and a further INR 1 billion–INR 1.5 billion in FY28. "We have got the fixed costs, and we have got the legacy issues, some legacy issues also, and we are still here to ramp up volumes and sell, so initial period will be tricky," an official said.

The company reiterated its focus on premiumisation of its products, adding that its premium products accounted for 25% of its portfolio in the June quarter. "As a brand, we work on premiumisation as a topic, so whether it is premium products or whether it is premium pricing, that is an agenda that we very strongly chase," the management said.

Dalmia Bharat reiterated its aim to increase its annual volumes to around 110 million tonnes by FY31. However, an executive added that this is "a directional number" and depends upon how the industry performs. "We can calibrate our speed, we can dial it up or dial it down... so, a couple of years here, there doesn't matter," he said. 

Friday, shares of Dalmia Bharat ended at INR 1,810.80 on the National Stock Exchange, down over 2% from Thursday.  End

Edited by Rajeev Pai

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