Summary
Dalmia Bharat Limited - Q3 FY26 Earnings Call Summary Wednesday, January 21, 2026 4:00 PM IST
Event Participants
Executives 4 Dharmender Tuteja (CFO, Dalmia Bharat Ltd), Prassan Goyal (Investor Relations Lead), Puneet Dalmia (MD & CEO, Dalmia Bharat Ltd), Yatin Malhotra (CFO, Dalmia Cement (Bharat) Ltd)
Analysts 8 Amit Murarka, Ashish Jain, Indrajit Agarwal, Jashandeep Singh Chadha, Kunal Shah, Navin Sahadeo, Pinakin, Satyadeep Jain
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume | 7.3 million tons | +9.5% YoY; Driven by strong demand traction in Northeast and East regions. |
| Revenue | ₹2,423 crores (est) | +10% YoY; Improved volumes offset by sequential NSR drop of 4% due to price corrections. |
| EBITDA | ₹602 crores | +18% YoY; Driven by operational efficiencies despite pricing headwinds. |
| EBITDA per Ton | ₹823/ton | +8.1% YoY; Improvement aided by cost take-out initiatives and lower logistics costs. |
| Net Debt | ₹1,793 crores | -3.7% QoQ; Remains healthy with Net Debt/EBITDA at 0.6x. |
| Logistics Cost | ₹1,030/ton (est) | -5.6% YoY; Driven by lead distance reduction to 277 km and 62% direct dispatches. |
| Raw Material Cost | ₹780/ton | +2% YoY; Impacted by additional mineral tax levy in Tamil Nadu. |
| Power & Fuel Cost | ₹1,019/ton | +1% YoY; Managed via 48% renewable energy share despite higher pet coke prices ($99/t). |
| Capacity | 46.6 million tons | +3.6 million tons clinker capacity commissioned at Umrangso, Assam during the quarter. |
Geographic & Segment Commentary
- Northeast: Commenced commercial production of a 3.6 MTPA clinker line at Umrangso, Assam, making the regional 8 MTPA cement capacity fully clinker-backed. This region offers high profitability and strong demand growth, with the company focused on rapid capacity ramp-up.
- East & South: Experienced price softening beyond the GST reduction impact in September. Management noted that while these regions saw the sharpest corrections, demand in East remains resilient due to infrastructure projects and low per-capita consumption.
- Expansion Markets (West/South): Projects in Belgaum-Pune and Kadapa are progressing on schedule. These expansions are critical to reaching the FY28 target of 75 million tons.
Company-Specific & Strategic Commentary
- Cost Leadership: Achieved ~₹50/ton of the ₹150-200/ton structural cost reduction target. Progress is driven by renewable energy (410 MW total capacity) and optimized logistics, despite a ₹160/ton headwind from Tamil Nadu mineral taxes.
- Capacity Growth Roadmap: Reaffirmed the target of 75 MTPA by FY28 and a long-term ambition of 110-130 MTPA by 2031. The Jaisalmer project (7-8 MTPA) is in active detailing with a final decision expected in the coming months.
- Market Positioning: Premium product share stood at 23%, with trade share at 62%. Management intends to push trade share back to the mid-to-high 60s as market conditions stabilize.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 CAPEX | ₹2,700 crores | Revised from ₹4,000 crores; includes Umrangso, Belgaum, and Kadapa projects. |
| FY27-28 CAPEX | ₹8,000 - ₹9,000 crores | Cumulative spend for next two years to fund the 75 MTPA roadmap. |
| Cement Demand | 7% - 8% YoY | Q4 FY26 industry growth expected at ~10% leading to 6% full-year growth. |
| Incentives | ~₹200 crores | Expected annual run rate for FY27 following the change in GST regime. |
| Leverage | < 2.0x Net Debt/EBITDA | Commitment to maintain a strong balance sheet during the expansion phase. |
Risks & Constraints
| Risk | Context |
|---|---|
| Pricing Volatility | Prices corrected more than expected post-GST cut; overcapacity and market share quests pose risks to sustained hikes. |
| Input Cost Inflation | Pet coke prices have risen recently; management aims to mitigate this by increasing domestic coal blending. |
| Regulatory/Legal | Ongoing ED investigation regarding Kadapa and ₹32 crore exceptional hit from new labor code implementation. |
Q&A Highlights
Pricing vs. GST Impact
- Question: Why did realizations drop 4% QoQ despite GST benefits? (Amit Murarka)
- Answer: Prices corrected excessively in East and South beyond the 10% GST differential; however, January shows early signs of recovery (Puneet Dalmia, Yatin Malhotra).
Expansion Strategy
- Question: How realistic is the 75 MTPA target by FY28 without the JP Associates assets? (Shravan Shah)
- Answer: Jaisalmer adds 7-8 MTPA and extra clinker in Northeast can support new grinding units in Bihar; work is already ongoing regardless of formal announcements (Yatin Malhotra).
Cost Efficiency
- Question: How much of the ₹150-200 efficiency target is realized? (Indrajit Agarwal)
- Answer: Roughly ₹50/ton is “in the bank” structurally, excluding external headwinds like fuel spikes and Tamil Nadu taxes (Yatin Malhotra).
Strategic Outlook
- Question: Will consolidation actually lead to higher prices given historical low-single-digit CAGR? (Ashish Jain)
- Answer: High entry barriers (limestone auctions) and rising replacement costs should eventually drive prices up, though Dalmia’s strategy is not dependent on price hikes for returns (Puneet Dalmia).
Key Takeaway
Dalmia Bharat delivered a robust 10% volume growth in Q3 FY26, reaching 7.3 million tons, supported by the commissioning of its new clinker line in Assam. While sequential realizations dropped 4% due to aggressive price corrections in the South and East, the company mitigated margin pressure through structural cost savings of approximately ₹50/ton and a reduction in logistics costs. Management remains committed to its 75 MTPA capacity target by FY28 and 110-130 MTPA by 2031, supported by a strong balance sheet (0.6x Net Debt/EBITDA). Despite short-term pricing caution, the outlook for Q4 is optimistic with expected industry demand growth of ~10% and early signs of price recovery. The company will focus on integrating its Northeast clinker capacity and firming up the Jaisalmer project to maintain its position as a low-cost, pan-India leader.
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