Dalmia Bharat (DALBHARAT) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw muted cement demand due to elections, heat waves, water shortages, and floods, with sector demand growing 2%-4% YOY.

• Sales volume rose 6.2% YOY to 7.4 million tons, including 0.2 million tons from JP assets, despite subdued demand.

• EBITDA increased 9.2% YOY to INR 669 crore (INR 901/ton), driven by cost reversals, input price improvements, and lower power and fuel costs.

• Industry consolidation accelerated, with top four players' capacity share rising from 48% to 55% in 15 months.

• Long-term goal remains 110-130 million tons capacity by 2031, with an interim milestone of 75 million tons by FY28.

Financial highlights

• Revenue was flat YOY at INR 3,621 crore as volume growth offset a similar decline in NSR.

• Power and fuel costs dropped 22% YOY to INR 1,003/ton, driven by increased renewable energy share to 35%.

• Raw material cost fell 5% YOY to INR 729/ton due to mining and procurement efficiencies; excluding JP, Rs 729/ton, otherwise Rs 779/ton.

• Logistic costs decreased 3.4% YOY to INR 1,117/ton.

• Depreciation declined by INR 82 crore YOY to INR 317 crore, reflecting changes in depreciation methods and absence of prior accelerated depreciation.

Outlook and guidance

• Prices expected to remain soft through Q2, with potential recovery from Q3 FY25.

• Guidance reiterated for 1.5x industry growth in FY25, targeting 12% volume growth vs. 8% industry.

• Cost reduction of INR 150-200/ton targeted over three years via RE, captive coal, and logistics improvements.

• CapEx for FY25 expected at INR 3,700-4,000 crore, mainly for organic expansion and efficiency projects.

• Renewable power agreements for 127 MW signed, with commissioning expected in FY25 & FY26.