Dalmia Bharat Q1 profit jumps 178% on price gains, volume recovery lags
- 24th July 2025
- 03:30:00 PM
- 4 min read
Mumbai | July 24 – Dalmia Bharat’s June quarter results highlight how pricing power is cushioning profits in a patchy demand environment for India’s cement sector. The company’s net profit surged 178% year-on-year to ₹3,930 crore in Q1FY26, driven by firmer pricing across its key southern and eastern markets, while revenue was largely flat at ₹36,360 crore. Average realisations improved 8.7% sequentially to ₹5,194 per tonne, reflecting price hikes since March, which helped offset a 5.4% year-on-year decline in volumes to 7 million tonnes. Operating performance was robust, with EBITDA rising 32% to ₹8,830 crore, expanding margins to 24.3% from 18.5% a year ago, while EBITDA per tonne increased 39.5% to ₹1,261, helped by lower traded goods costs as high-cost tolling volumes ended.
Prabhudas Lilladher (PL Capital) noted, “With the first leg of consolidation complete, most companies are shifting to a value-over-volume strategy to generate cash flows for incremental capacity growth, benefiting players like Dalmia Bharat.” PL Capital raised its EBITDA estimates by 3.7% for FY26 and 4.5% for FY27, adding that pricing will remain a key monitorable as cement producers focus on balancing growth with profitability. Dalmia Bharat’s capital expenditure pipeline remains active, with a ₹32,870 crore investment lined up for a 3.6mtpa clinker and 6mtpa grinding capacity at Kadapa, Andhra Pradesh, and a 3mtpa bulk terminal in Chennai, targeting 61.6mtpa by FY28. Its Assam clinker unit is expected to start by Q3FY26, while the Belgaum-Pune project remains on track for FY27. The company added 26MW of renewable energy during the quarter, taking its operational base to 294MW, with a goal of reaching 576MW by FY26 as it aims to manage fuel costs, which edged up to ₹1,036 per tonne despite higher renewable usage.
Management indicated cautious optimism, guiding for 6-7% industry growth in FY26 while maintaining price stability into July. The company reiterated its target of achieving ₹150–₹200 per tonne in cost savings by FY27, even as Tamil Nadu’s mineral tax is expected to keep input costs elevated in the near term. Capex in Q1 stood at ₹6,120 crore, primarily towards the Umrangso clinker unit and Belgaum-Pune projects, with the company confirming plans to spend ₹40,000 crore each in FY26 and FY27, mostly towards capacity expansion and land acquisition. Net debt was stable at ₹8,730 crore, with a net debt to EBITDA ratio of 0.33x. “We continue to focus on balancing volume and profitability while driving operational efficiencies and renewables adoption,” management said during the call, underscoring its strategy of disciplined margin expansion rather than chasing aggressive volumes.
For investors, Dalmia Bharat’s performance positions it as a steady play on India’s cement sector, balancing profitable growth while expanding capacity. PL Capital has revised its target price on the stock to ₹2,395 (from ₹2,303 earlier), valuing it at 11x EV/EBITDA on FY27 estimates. At current levels, Dalmia Bharat shares trade at 12.5x FY26 estimated EV/EBITDA, leaving scope for moderate upside if pricing momentum holds as demand gradually recovers. The potential acquisition of Jaiprakash Associates’ assets, which could add at least 5mtpa capacity, remains a catalyst to watch as the company executes its expansion pipeline. PL Capital noted, “Dalmia Bharat’s focus on profitable volume growth, strong cost control, and disciplined project execution positions it well as the cement sector moves towards value-driven consolidation.”
Dalmia Bharat Q1FY26: Key Numbers
- Revenue: ₹36,360 crore (+0.4% YoY)
- Net Profit: ₹3,930 crore (+178% YoY)
- EBITDA: ₹8,830 crore (+32% YoY)
- EBITDA Margin: 24.3% (vs 18.5% YoY)
- EBITDA per tonne: ₹1,261 (+39.5% YoY)
- Volumes: 7mt (-5.4% YoY)
- Capex: ₹6,120 crore in Q1FY26; plans for ₹40,000 crore in FY26/FY27
PL Capital View
Dalmia Bharat’s Q1 numbers reflect its pricing strength and operational discipline in a challenging demand environment, supporting steady earnings with room for upside as industry demand stabilises. PL Capital recommends adding the stock on dips for long-term investors, while monitoring execution on its capacity expansion, cost-saving initiatives, and inorganic opportunities that will shape its growth trajectory in India’s cement sector.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
