Detailed Narrative
Q1 FY27 Performance Overview
Dalmia Bharat Limited reported a robust 9% Y-o-Y volume growth in Q1 FY27, despite state elections in key markets causing temporary moderation in construction activity. Revenues from operations increased by 7% Y-o-Y to INR3,890 crores, driven by higher sales volumes and 6% Q-o-Q improvement in realizations. The share of premium products in the portfolio reached 25%. However, absolute EBITDA declined 11% Q-o-Q to INR805 crores, primarily due to elevated input costs, though EBITDA per ton improved sequentially to INR1,055.
Market Dynamics and Economic Outlook
India continues to be one of the fastest-growing major economies, with RBI projecting 6.6% growth for FY27. Domestic consumption remains strong, evidenced by GST collections reaching an all-time high of INR6.3 lac crores in Q1 FY27. Government capital spending increased by 21% in the first two months, reflecting commitment to infrastructure. Cement demand is expected to grow at a healthy 7% for FY27, with Dalmia's organic growth anticipated to be in line with the industry.
Cost Management and Pricing Discipline
The quarter was significantly impacted by elevated input costs, with pet coke prices surging to nearly $160 per ton before moderating to $130-135 per ton. Raw material cost per ton increased 12% Q-o-Q to INR823, and power and fuel cost per ton rose 10% Y-o-Y to INR1,045. To mitigate this, the company implemented measures like better planning, inventory management, and fuel mix optimization, generating savings of over INR150 per ton. Healthy price increases of INR10-15 in South and INR15-20 in East markets helped pass on a significant portion of the input cost inflation.
Jaypee Cement Acquisition and Integration
Dalmia Bharat successfully completed the acquisition of Jaypee Cement assets on May 29, 2026, for an enterprise value of INR2,850 crores. This acquisition adds 5.2 million tons of cement capacity and 3.3 million tons of clinker capacity in Central India. Integration is progressing rapidly, with the Chunar Grinding Unit commencing operations and the Rewa clinker unit starting trial production within 50 days. The company expects these assets to contribute meaningfully to volumes from Q3 FY27 onwards, aiming for EBITDA neutrality by the end of FY27 and normal Dalmia EBITDA in 7-8 quarters.
Capacity Expansion Plans
With the Jaypee acquisition and ongoing projects, Dalmia's cement capacity is projected to reach 67 million tons by Q3 FY28. The Belgaum expansion project is ahead of schedule and is expected to commission commercial production within the next 6 months. Site excavation is underway for Kadapa and Pune projects, with commissioning expected in FY28. The company's long-term vision is to become a pan-India player with approximately 110 million tons capacity by FY31, maintaining flexibility in its expansion pace based on market conditions.
Capital Allocation and Financial Health
Capital expenditure during Q1 FY27 was INR510 crores. The total capex commitment for FY27 is projected to be INR3,200-3,400 crores, with INR2,200 crores allocated for growth projects and the balance for maintenance, Jaypee catch-up📎 capex, and ROI projects. Gross debt increased to INR9,108 crores due to acquisition funding, but net debt stood at INR4,431 crores, resulting in a net debt to EBITDA ratio of 1.47x, comfortably below the 2x target. The company emphasizes disciplined capital allocation and maintaining a strong balance sheet.