NEW DELHI: Dalmia Bharat (DALBHARA), a major player in India’s cement industry, has posted an EBITDA that was approximately 8% below expectations for the third quarter of FY25. The company’s sales volume remained flat quarter-on-quarter (QoQ), indicating its inability to capitalize on seasonal demand recovery. Net debt surged, doubling QoQ to INR 12.4 billion, attributed to increased capital expenditures and mark-to-market losses from its investment in the Indian Energy Exchange (IEX).
Despite a December price hike leading to a sequential recovery in EBITDA per tonne, Dalmia Bharat faced weak volumes and higher-than-expected operating costs. The blended realization dipped about 10% year-on-year (YoY) but rose 3% QoQ to INR 4,762 per tonne, marginally surpassing estimates. However, sales volume decreased by 2% YoY and remained flat at 6.7 million tonnes QoQ, falling 5% short of expectations.
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In response to these results, the company has revised its target price to INR 2,023, down from INR 2,265, based on a projected 11x EV/EBITDA multiple for March 2027. Despite challenges, Dalmia Bharat is maintaining its “Accumulate” rating, supported by a recovery in margins due to higher cement prices, the ramp-up of newly added capacities, and ongoing cost-saving measures.
Capex expansion remains on track, with the addition of clinker capacity in Odisha and Andhra Pradesh, as well as ongoing cement projects in Bihar and Assam. The company also reported an increase in its renewable energy capacity, now reaching 252 MW, with expectations to hit 267 MW by FY25.
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Looking ahead, Dalmia Bharat is focused on long-term growth, with further expansion projects expected to be announced by Q2FY26. In the short to medium term, the ramp-up of underutilized plants and capacity expansion in high-margin markets like Northeast India are expected to drive earnings.