Why Is Dalmia Bharat Confident of Profitable Growth and Cost Control in FY26?
Dalmia Bharat’s Q2 FY26 concall reinforced its commitment to profitable growth, operational excellence, and sustainability-led cost reduction. The company delivered another strong quarter, highlighting improved margins, energy efficiency, and clear visibility on capacity expansion projects that underpin long-term volume growth.
For the quarter ended September 2025, Dalmia Bharat reported revenue of ₹3,417 crore, up 10.7% YoY, with EBITDA rising 55% YoY to ₹696 crore. EBITDA per tonne crossed ₹1,000 for the second consecutive quarter, a key profitability milestone for the cement major. EBITDA margin expanded to 20.4% from 14.1% a year ago, led by better realizations and operational discipline.
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The company’s sales mix remained healthy, with trade contributing 62% and premium products 22%. While QoQ realizations dipped slightly due to a lower trade share, the overall trend remained positive. Volume grew 2.9% YoY, with realization growth of 7.6%. Dalmia emphasized that “profitable growth” continues to be its top priority, balancing pricing and cost discipline.
Management noted that demand in Q1 and Q2 remained muted due to erratic rainfall, flooding, and project delays. However, H2 FY26 is expected to see a sharp recovery with pent-up infrastructure demand, favorable monsoons, and government-led spending ahead of election cycles. Prices remained stable despite weather challenges, which the management termed a “positive surprise.”
On the cost front, Dalmia’s fuel and power expenses averaged around $100 per ton, with petcoke at $116. The company targets to reduce production costs by ₹150–200 per ton over two years through renewable energy adoption and process efficiencies. Logistics cost dropped 3.8% YoY to ₹1,060 per ton, aided by optimized freight operations and railway surcharge waivers.
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The renewable energy portfolio expanded by 93 MW this quarter, taking total RE capacity toward the FY26 target of 576 MW. The company’s commitment to decarbonization and efficiency reflects in its cost-reduction roadmap. The Assam clinker line (3.6 MTPA) has entered trial runs, with commercial operations expected in Q3 FY26, while Belgaum and Kadappa projects (12 MTPA) remain on track.
Capex spending for FY26 is pegged at ₹3,000 crore, lower than planned, due to favorable supplier terms and project timing. FY27 capex is estimated at ₹4,000 crore. Management reaffirmed its 75 MTPA capacity goal by FY28. The Jesselmere (Rajasthan) expansion remains in the regulatory stage, with an update expected by March 2026.
Financially, Dalmia’s balance sheet remains healthy, with gross debt at ₹6,621 crore and net debt at ₹1,602 crore, translating to a Net Debt/EBITDA of just 0.56x. Borrowing cost averaged 6.9%, and leverage is expected to stay below 2x despite upcoming expansion. The company announced an interim dividend of ₹4 per share.
On the organizational front, Dalmia has introduced a variable pay plan for mid-to-senior employees linked to profitability and safety metrics. Aniruddha (ex-BCG) has been appointed as Chief Strategy Officer to drive transformation and growth. The company reiterated its focus on a “profitability-first” approach driven by premiumization, RE integration, and supply chain excellence.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that Dalmia Bharat’s Q2 FY26 performance reflects strong cost discipline, strategic capacity additions, and balance sheet strength. The company’s sustained focus on renewable energy and premiumization could drive consistent profitability in FY27 and beyond.
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Related Queries on Cement Sector Outlook
- Why Did Dalmia Bharat Achieve Record Margins in Q2 FY26?
- How Will Renewable Energy Integration Reduce Dalmia’s Production Costs?
- What Is Dalmia Bharat’s Growth Plan Toward Its 75 MTPA Target?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
