Dalmia Bharat reported a quarterly loss. One-time charges caused the loss, but the business underneath is also under strain: operating profit fell almost a third as fuel costs rose and volumes grew slowly.
Dalmia Bharat, India’s fourth-largest cement maker, reported a consolidated net loss of ₹205 crore for the September quarter, compared with a profit of ₹239 crore a year earlier. Revenue rose 4% to ₹3,563 crore.
The loss was mainly caused by ₹339 crore of exceptional charges. These included about ₹282 crore of impairments on old power plants and on brands the company is discontinuing, and about ₹57 crore for employee restructuring. These are one-time costs that will not recur.
Under pressure?
Even excluding those charges, the quarter was weak. EBITDA fell 29% to ₹493 crore. Sales volume rose just 3% to 7.1 million tonnes, much slower than the 18% growth Shree Cement reported last week or the roughly 14% growth at UltraTech.
Dividing EBITDA by volume, Dalmia earned roughly ₹700 per tonne this quarter. In the June quarter it earned ₹1,055 a tonne. That is a sharp fall in one quarter.
Fuel costs are the main cause. In July, management warned that input costs would rise by ₹70–80 a tonne in the September quarter because of the West Asia conflict. Petcoke, a key cement kiln fuel, was still above its pre-war price then, and energy prices rose further during the quarter. Dalmia has a large presence in eastern India, where price competition, particularly in Bengal, has made it harder to pass on higher costs.
Across the sector
Dalmia is the third major cement company in a week to report fuel costs hurting profits. UltraTech missed profit estimates, and Shree Cement’s earnings per tonne fell 8% even as its volumes grew 18%. Shree Cement has warned that fuel costs will rise further in the December quarter.
Construction demand from roads, housing and urban projects is healthy. The difficulty is cost: cement making uses a lot of energy, and the global energy shock is raising fuel prices faster than companies can raise cement prices.
Some positives
There were some positives. Dalmia said it had extinguished a ₹279 crore liability related to mineral-bearing land tax, which removes a long-standing uncertainty. The board declared an interim dividend of ₹4 a share, with a record date of 30 October.
Dalmia is also in the middle of a large expansion. It is integrating cement assets acquired from Jaiprakash Associates and plans capital spending of ₹3,200–3,400 crore this year, with capacity expected to reach about 67 million tonnes by late FY28. Management has said the Jaypee assets should reach EBITDA break-even within about two quarters.
What to watch
The second half of the year usually brings stronger cement demand after the monsoon. For Dalmia, recovery depends on whether it can raise prices in eastern India and whether fuel costs ease. With oil prices high and further energy disruption possible, the cost pressure may last longer than the company expected.
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