Detailed Narrative
Strong FY26 Performance and Q4 Momentum
Dalmia Bharat delivered its best-ever FY26 EBITDA of ₹3,083 crores, marking a 28% increase year-on-year, and a PAT of ₹1,157 crores, up 65%. The fourth quarter of FY26 also showed strong momentum, with EBITDA reaching ₹902 crores, a 50% sequential jump. Sales volume grew 3% YoY in Q4 to 8.8 million tons, contributing to a 2% volume growth and 6% revenue growth for the full fiscal year.
Robust Cost Management Amid Headwinds
Despite significant cost inflation driven by the West Asia conflict, including petcoke prices soaring to $160 per ton and Rupee depreciation, Dalmia Bharat achieved its lowest quarterly total cost per ton in the last five years. Raw material cost per ton decreased by 1% YoY and 6% QoQ to ₹734, while logistics costs fell 6% YoY to ₹1,064 per ton. The company's strategic focus on fuel mix optimization and increased renewable energy share (from 39% to 47% in Q4) helped mitigate these pressures.
Aggressive Capacity Expansion and ROCE Improvement
The company is actively pursuing its strategic goal of reaching 72-75 million tons of cement capacity by FY28. Ongoing projects in Belgaum, Pune, and Kadapa are progressing, with Belgaum expected to commission ahead of schedule and Kadapa between Q2 and Q3 FY28. This expansion drive contributed to a significant improvement in ROCE from core cement assets, which rose from 9.9% to 12.1% in FY26.
Healthy Balance Sheet and Capital Allocation
Dalmia Bharat maintains a robust financial position, reporting a net debt of ₹1,428 crores and a net debt-to-EBITDA ratio of 0.46x, significantly below its internal threshold of 2.0x. The company has outlined a total capex outlook of ₹3,200-3,400 crores for FY27, with approximately ₹2,200-2,300 crores earmarked for ongoing expansion projects and the remainder for regular operational capex.
Indian Economy and Cement Sector Outlook
Management expressed strong confidence in India's economic growth, anticipating it to become the third-largest economy globally. They project substantial investments in infrastructure, driving cement demand to grow at a CAGR of 7-8% in the medium term. The company aims to outperform industry volume growth and has successfully passed on cost increases through pricing in April, indicating optimism for margin protection.
Challenges and Mitigation Strategies
The company faced operational challenges in Q4 FY26, including an unexpected breakdown in East India and minor project delays, which impacted volumes and cash outflows. Looking ahead, a cost increase of ₹125-150 per ton is anticipated in Q1 FY27 due to geopolitical factors. Dalmia Bharat is implementing various internal measures, including fuel mix optimization and logistics initiatives, to mitigate these impacts and maintain profitability.