Dalmia Bharat Limited Q1 FY26 Earnings Release and Investor Presentation Analysis

Dalmia Bharat Limited has released its Earnings Release / Investor Presentation for Q1 FY26, providing a comprehensive overview of the company’s financial performance, operational achievements, capacity expansion plans, and sustainability initiatives. The presentation highlights a robust financial quarter with record EBITDA and continued progress on strategic growth projects and ESG commitments.

Disclaimer

Certain statements in this presentation describing the Company’s objectives, projections, estimates and expectations may be ‘forward looking statements’ within the meaning of applicable laws and regulations. Although our expectations are based on reasonable assumptions, these forward-looking statements may be influenced by numerous risks and uncertainties that could cause actual outcomes and results to be materially different from those expressed or implied. The Company takes no responsibility for any consequence of decisions made based on such statements and holds no obligation to update these in the future. The past financial figures have been regrouped or rearranged as per the current grouping, wherever necessary.

Analysis of Disclaimer: This is a standard disclaimer for investor presentations, cautioning that forward-looking statements are subject to risks and uncertainties. It also mentions that past financial figures may have been regrouped for consistency. This note is typical and does not raise any specific red flags but advises caution regarding future projections and understanding data presentation.

Key Highlights

Financial Performance

• Sales Volume stood at 7.0 MnT during the quarter.
• EBITDA improved 32% YoY to Rs 883 Cr (Highest ever Quarterly EBITDA); EBITDA/T improved 40% YoY to Rs 1,261.
• NSR/T Increased by 6.6% YoY to Rs 5,193.
• Net Debt/EBITDA stood at 0.33x as on June 30, 2025.

Capacity

• Announced strategic investment of Rs 3,287 Cr to establish a 3.6 MnTPA Clinker unit with a 6 MnTPA grinding unit at Kadapa, Andhra Pradesh (3 MnTPA Bulk Terminal at Chennai, Tamil Nadu).
• Clinker capacity expansion of 3.6 MnTPA at Umrangso, Assam is in advanced stage.
• 6 MnTPA Belgaum-Pune project is progressing as per plan.

Other highlights

• In line with the commitment to exit non-core assets, divested 4.1% holding in IEX Ltd amounting to Rs 742 Cr; holding in IEX now reduced to 10.8%.
• Commissioned 26 MW of RE capacity under Group Captive, increasing total operational RE capacity to 294 MW.
• ICRA ESG has upgraded its Combined ESG rating to 80 (Exceptional) for Dalmia Bharat, underscoring its status as one of the leaders in sustainability within the Indian cement sector.

Expansion & Capex Update

Dalmia Bharat Limited is significantly expanding its capacities with new integrated units and bulk terminals.

New Expansion & Capex Details

Category	Details
Integrated Unit	Kadapa, Andhra Pradesh
Bulk Terminal	Chennai, Tamil Nadu
Clinker Capacity	3.6 MnTPA at Kadapa
Cement Capacity	6.0 MnTPA at Kadapa (Bulk Terminal: 3.0 MnTPA)
Capex Cost	Rs 3,287 Cr
Expected commissioning	Q2 FY28

Rationale for Kadapa & Chennai Expansion

• Existing Capacity: Kadapa already has 3.6 MnTPA capacity operating at high utilization.
• Market Proximity: Large cities within 300-400 kms of Kadapa, including Bangalore & Chennai, offer significant demand.
• Strengthening Presence: The Kadapa unit will bolster presence in Andhra Pradesh and Southern Karnataka markets.
• Underserved Markets: Volumes from the Chennai Bulk Terminal will target underserved markets of Northern Tamil Nadu.

Capacity Milestones

The company is inching towards a target capacity of 75.0 MnTPA by FY28e.

Capacity Expansion (in MnTPA)

Project/Year	FY25	FY26	FY27	Q2 FY28	FY28e Milestone
Greenfield
Brownfield
3 MnTPA Bulk Terminal
Total	49.5	55.5	61.5	75.0	75.0

The chart shows the current capacity at 49.5 MnTPA in FY25, reaching 55.5 MnTPA in FY27 (with Belgaum, KA and Pune, MH expansions) and then jumping to 61.5 MnTPA in Q2 FY28 with Kadapa, AP. The FY28e milestone is 75.0 MnTPA. Note: The chart appears to show incremental capacity rather than total. Reinterpreting the chart in the presentation, it looks like a phased increase in total capacity.

Clinker Capacity Expansion Plan (in MnT)

Figures in MnT	South	East	North East	West	Total
FY25	10.4	8.3	2.7	2.1	23.5
FY26	10.4	8.3	6.3	2.1	27.1
FY27	14.0	8.3	6.3	2.1	30.7
Q2 FY28	17.6	8.3	6.3	2.1	34.3

Key Milestones of Growth Projects

Project	Umrangso, Assam	Belgaum, Karnataka Pune, Maharashtra	Kadapa, Andhra Pradesh
Capacity	Clinker Capacity - 3.6 MnTPA	Clinker Capacity - 3.6 MnTPA, Cement Capacity – 6 MnTPA	Clinker Capacity - 3.6 MnTPA, Cement Capacity – 6 MnTPA (Bulk Terminal – 3 MnTPA at Chennai, Tamil Nadu)
Milestones	Erection and Electrical & Instrumentation work at full swing	All major orders placed	Plant land available
	Trial run expected in Sep'25; commercial production in Q3FY26	Civil work under progress	Public Hearing completed

Q1 FY26 Performance

Quarterly Sales Volume (MnT)

Period	Sales Volume (MnT)
Q1FY25	7.4
Q4FY25	8.6
Q1FY26	7.0

• Sales volume declined by 5.8% on YoY basis (0.4 MnT - Jaypee tolling volumes discontinued since July'24).
• Sales volume declined by 18.2% QoQ.

Quarterly Revenue (Rs Cr)

Period	Revenue (Rs Cr)
Q1FY25	3,621
Q4FY25	4,091
Q1FY26	3,636

• Revenue - flattish on YoY basis (increased by 0.4%) as increase in cement prices & better price positioning is offset by lower volumes.
• Revenue declined by 11.1% QoQ.

Quarterly Cost of Raw Material Consumed^ (Rs/T)

Period	Raw Material Cost (Rs/T)
Q1FY25	779*
Q4FY25	743
Q1FY26	791

• Largely due to Mineral Bearing Land Tax imposed by Tamil Nadu government on limestone at Rs 160/T since 4th April 2025.
• Cost increased by 1.5% YoY and 6.4% QoQ.
• *Excluding the Cost of Purchases from Jaiprakash Associates, our Raw Material Cost in Q1 FY25 was Rs 729 per ton of cement production.
• ^ Basis Cement Production (not sales volume).

Analysis of Note on Raw Material Cost: The increase in raw material cost is attributed to a new Mineral Bearing Land Tax of Rs 160/T imposed by the Tamil Nadu government from April 4, 2025. This is a specific external factor impacting profitability. The note also clarifies that the costs are presented on a cement production basis, not sales volume. The Q1 FY25 cost without Jaiprakash purchases was Rs 729/ton, indicating an underlying increase even without the new tax.

Quarterly Power & Fuel Cost^ (Rs/T)

Period	Power & Fuel Cost (Rs/T)
Q1FY25	1,003
Q4FY25	945
Q1FY26	981

• Fuel consumption cost declined from $106/T in Q1 FY25 ($95/T in Q4 FY25) to $100/T in Q1 FY26.
• Share of RE power improved to 41.2%.
• Cost declined by 2.2% YoY but increased by 3.8% QoQ.
• ^ Basis Cement Production (not sales volume).

Analysis of Note on Power & Fuel Cost: The company managed to reduce its fuel consumption cost year-on-year, primarily due to an improved share of Renewable Energy (RE) power, reaching 41.2%. This demonstrates effective cost management and a focus on sustainable energy.

Quarterly Logistics Cost (Rs/T)

Period	Logistics Cost (Rs/T)
Q1FY25	1,117
Q4FY25	1,135
Q1FY26	1,135

• Logistics cost increased on YoY basis (1.6%) due to increase in Lead distance partially offset by increase in Direct Dispatch %.
• Logistics cost remained flat QoQ.

Total Cost (Rs/T)

Period	Total Cost (Rs/T)
Q1FY25	3,973
Q4FY25	3,852
Q1FY26	3,932

• Total Cost decreased by 1.0% YoY but increased by 2.1% QoQ.
• Dalmia Bharat consistently upholds its position as one of the lowest total cost producer.

Quarterly EBITDA (Rs Cr)

Period	EBITDA (Rs Cr)	EBITDA Margin %
Q1FY25	669	18.5%
Q4FY25	793	19.4%
Q1FY26	883	24.3%

• Highest Ever Quarterly EBITDA of Rs 883 Cr.
• EBITDA increased on YoY basis (31.9%) primarily on account of improvement in NSR per ton.
• EBITDA increased by 11.3% QoQ.

Debt Position

Metrics	Mar'25 (Rs Cr)	June'25 (Rs Cr)
Gross Debt	5,279	6,456
Cash & Cash Equivalents*	-4,562	-5,583
Net Debt	716	873
Net Debt / EBITDA	0.30x	0.33x

• Issued NCDs worth Rs 950 Cr at weighted average cost of 7.5%, led to increase in Gross debt and Cash & cash equivalents.
• * Includes MTM value of IEX Investment (Q4FY25: Rs 2,339 Cr; Q1FY26: Rs 1,861 Cr); divested 4.1% holding in IEX Ltd amounting to Rs 742 Cr; holding in IEX now reduced to 10.8%.

Analysis of Note on Debt Position: The increase in gross debt and cash & cash equivalents from March to June 2025 is primarily due to the issuance of Non-Convertible Debentures (NCDs) worth Rs 950 Cr at a competitive weighted average cost of 7.5%. The Net Debt to EBITDA ratio remains low at 0.33x, indicating healthy debt management. The note also clarifies the fair value (MTM) of the IEX investment and the recent divestment, showing a reduction in IEX holding, aligning with the strategic goal of exiting non-core assets.

Finance Cost (Rs Cr)

Q1 FY26

Category	Amount (Rs Cr)
Interest Cost	79
Other charges	29
Total Finance Cost	108

• Cost of Borrowing: 7.5%

Q1 FY25

Category	Amount (Rs Cr)
Interest Cost	69
Other charges	26
Total Finance Cost	95

• Cost of Borrowing: 8.3%

Analysis of Finance Cost: Total finance cost increased from Rs 95 Cr in Q1 FY25 to Rs 108 Cr in Q1 FY26. However, the cost of borrowing has decreased from 8.3% to 7.5%, indicating a more efficient debt structure, likely due to the NCD issuance at a lower rate.

ESG & Others

Renewable Power Update

Dalmia Bharat continues to increase its renewable energy capacity.

Renewable Power Capacity (in MW)

Period	Group Captive	Solar	WHRS	Total
FY20	17			17
FY21	32			32
FY22	31	32		63
FY23	66	100		166
FY24	72	113		185
FY25	72	136	59	267
Q1FY26	72	136	85	294
FY26e	88	172	316*	576

• Commissioned 26 MW of group captive renewable energy in Q1 FY26.
• Operational RE capacity is expected to reach 576 MW by the end of FY26.
• *Opex capacity expected to reach 316 MW by FY26 (334 MW earlier), as 18 MW of Opex capacity is spilled over to FY27.

Analysis of Note on Renewable Power: The company is making significant strides in increasing its renewable energy footprint, with a substantial jump in total capacity to 294 MW and a target of 576 MW by FY26 end. The note clarifies a minor shift in 18 MW of Opex capacity to FY27, indicating a well-planned long-term RE strategy.

ESG at Dalmia Bharat

Metric	Value
CO₂ Emission (kg/ton of cementitious material)	452
Water Positivity* (Times)	23x
Renewable Energy Consumption	41.2%
ICRA ESG Rating	80 Exceptional

*Data for Q1 FY26; *For FY25

CSR at Dalmia Bharat

Climate Action:

• Provided 1.4 lac bamboo shoots (in partnership with GIZ), covering 400+ households across 19 villages in Umrangso, Assam.
• Potential to increase income by Rs 60,000 p.a.
• Full-grown bamboo shoot will annually reduce a minimum of ~21 lac kgs of CO₂.

Social Infrastructure:

• Mobile Medical Unit launched to serve 7 remote villages in Chhindwara, MP, screening and treating nearly 1,000 patients and providing free medication.
• 4,000+ villagers benefitted through various health interventions.

Livelihood:

• Community village pond desilted in Kallagam village, Dalmiapuram, ensuring water availability for agriculture, maintaining soil moisture, and providing drinking water for cattle.
• Expected to conserve 50,000 KL of water annually.

Sustainability Awards

• 13th Mines Environment & Mineral Conservation Week:
  • First Prize in Overall Performance.
  • First Prize in Waste Dump Management, Systematic & Scientific Development.
  • First Prize in Environmental Monitoring & Sustainable Development.
• National Safety Council of India Award:
  • Certificate of Appreciation for Excellence in Occupational Safety & Health - Dalmiapuram.
• Excellence in Safety Standards in the Lifting Industry:
  • Golden Hook Award For successful completion of Projects – Lanka II.
  • Excellence in Lifting Process & Planning for heaviest single lift of clinker dome 221 MT – Lanka II.

Annexure

Operational Performance (basis cement production)

Operational performance (Rs/T)

Particulars	Q1 FY25	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26
Cost of Raw Material Consumed	779*	789	765	743	791
Power & Fuel	1,003	1,012	1,005	945	981

*Excluding the Cost of Purchases from Jaiprakash Associates, Our Raw Material Cost in Q1 FY25 was Rs 729 per ton of cement production

Impact on PBT due to Goodwill Amortization (Restructuring Related)

Impact on PBT due to Goodwill Amortization (Rs Cr)

Particulars	Q1FY25 With Restructuring	Q1FY25 Without Restructuring	Q1FY26 With Restructuring	Q1FY26 Without Restructuring
Income from Operations	3,621	3,621	3,636	3,636
Less:-Operating Expenses	2,952	2,952	2,753	2,753
EBITDA	669	669	883	883
Add:- Other Income	50	50	49	49
Less:-Depreciation / Amortization	317	266	322	322
Less:- Finance Cost	95	95	108	108
Profit before share of profit in associate and joint venture and exceptional item	307	358	502	502

Analysis of Note on Goodwill Amortization: Dalmia Bharat has amortized goodwill from the slump exchange of assets and liabilities of Odisha Cement Limited (now Dalmia Bharat Limited) over a 10-year period, as sanctioned by the National Company Law Tribunal. This is a deviation from Ind AS 38 (Intangible Assets) requirements, which typically do not permit amortization of goodwill. The note states that this goodwill was fully amortized as on 31st December 2024.

Material Significance: This note is crucial as it clarifies a non-standard accounting treatment for goodwill (amortization instead of impairment testing as per Ind AS 38). The “Without Restructuring” column for Depreciation/Amortization in Q1FY25 shows a lower value (Rs 266 Cr) compared to “With Restructuring” (Rs 317 Cr), meaning the goodwill amortization added Rs 51 Cr to D&A in Q1FY25. However, for Q1FY26, both “With” and “Without” restructuring show Rs 322 Cr for Depreciation/Amortization, and the note explicitly states that the goodwill was fully amortized as of December 31, 2024. This implies that from Q1 FY26 onwards, there is no impact of this specific goodwill amortization on the P&L, aligning the reported profit with what it would have been without this specific amortization. This is a positive development for future profitability reporting as this non-cash expense is no longer a factor.

Summary

Dalmia Bharat Limited reported a strong Q1 FY26, showcasing resilience and strategic progress despite some operational challenges.

Key Changes (YoY basis):

• Sales Volume: Declined by 5.8% to 7.0 MnT, primarily due to the discontinuation of Jaypee tolling volumes from July 2024.
• Revenue: Remained largely flattish (increased by 0.4%) at Rs 3,636 Cr, as better price positioning and increased cement prices offset the lower sales volumes.
• EBITDA: Surged by 31.9% to a record high of Rs 883 Cr, driven by improved Net Sales Realization (NSR) per ton. EBITDA margin significantly expanded to 24.3% from 18.5% in Q1 FY25.
• Costs:
  • Raw Material Cost (Rs/T): Increased by 1.5% to Rs 791/T, mainly due to a new Mineral Bearing Land Tax imposed by the Tamil Nadu government from April 2025.
  • Power & Fuel Cost (Rs/T): Decreased by 2.2% to Rs 981/T, benefiting from a lower fuel consumption cost ($100/T) and an increased share of renewable energy (41.2%).
  • Logistics Cost (Rs/T): Increased by 1.6% to Rs 1,135/T, attributed to longer lead distances, partially mitigated by higher direct dispatch percentage.
  • Total Cost (Rs/T): Overall, total cost declined by 1.0% YoY, reinforcing Dalmia Bharat’s position as a low-cost producer.
• Debt Position: Net Debt to EBITDA remained low at 0.33x as of June 30, 2025. Gross debt increased due to the issuance of Rs 950 Cr worth of NCDs at a favorable weighted average cost of 7.5%, which also led to higher cash and cash equivalents. The company also divested 4.1% of its IEX Ltd holding, reducing it to 10.8%, in line with its non-core asset exit strategy.
• Finance Cost: While total finance cost increased, the overall cost of borrowing reduced from 8.3% to 7.5% YoY, reflecting efficient treasury management.
• Goodwill Amortization: The previous goodwill amortization, which impacted Q1 FY25 PBT, is no longer a factor from Q1 FY26 onwards as it was fully amortized by December 31, 2024. This will positively impact reported profits moving forward.

Strategic Initiatives & ESG:

• The company announced a significant Rs 3,287 Cr investment for a new 3.6 MnTPA clinker unit and 6 MnTPA grinding unit at Kadapa, Andhra Pradesh, along with a 3 MnTPA bulk terminal at Chennai, Tamil Nadu, targeting commissioning by Q2 FY28. This is part of the plan to reach 75.0 MnTPA capacity by FY28e.
• Progress is well underway on other expansion projects in Umrangso (Assam) and Belgaum-Pune.
• Dalmia Bharat reinforced its commitment to sustainability by commissioning 26 MW of new renewable energy capacity, bringing the total operational RE capacity to 294 MW, with a target of 576 MW by FY26 end.
• The company achieved an “Exceptional” ICRA ESG rating of 80, highlighting its leadership in sustainability. CSR initiatives in climate action, social infrastructure, and livelihood development also continued to make a positive impact.

In conclusion, Dalmia Bharat delivered a strong financial performance in Q1 FY26 with record profitability, effectively managed costs despite external pressures, and continued aggressive expansion while prioritizing sustainability and debt efficiency.