Dalmia Bharat Limited: An Ambitious Roadmap For FY24

“I continue to have deep conviction on the Indian growth story and would reiterate that the next two or three decades really belong to our country with GDP growth expected at 6.5% to 7% in FY24 and beyond. I think that for India to leverage this opportunity that lies ahead of it and for the government to generate employment opportunities for millions of people, who are getting added to the workforce every year, the thrust on infrastructure development, increased public spending and augmentation of private CAPEX is imminent and cement sector would be a direct beneficiary of this. I strongly believe that Dalmia’s growth will continue to accelerate as India accelerates. From the end of financial year 22 we have increased our capacity by almost 15% from 35.9 million tons to 41.1 million tons per annum at present.”
-Puneet Dalmia, Managing Director

Stock Data

Ticker	DALBHARAT
Industry	Cement
Exchange	NSE & BSE

Share Price

Last 1 Month	1.2%
Last 6 Months	16.5%
Last 12 Months	58.1%

Business Basics

Dalmia Bharat Limited is a leading conglomerate in India with a rich heritage in various industries. The company operates primarily in the sectors of cement, sugar, and refractories. Dalmia Bharat’s business model is focused on creating value through sustainable growth, innovation, and operational excellence. In the cement segment, Dalmia Bharat is one of the largest manufacturers of cement in India. The company has a diverse product portfolio, including different types of cement such as ordinary Portland cement, Portland pozzolana cement, and slag cement. Dalmia Bharat’s cement plants are strategically located across the country, enabling it to cater to the growing demand in both domestic and international markets. The company is known for its commitment to quality, customer satisfaction, and sustainable practices in cement manufacturing.

Dalmia Bharat is also engaged in the sugar business, with sugar mills located in Uttar Pradesh and Maharashtra. The company produces a wide range of sugar products, including refined sugar, specialty sugar, and by-products such as molasses and bagasse. Dalmia Bharat’s sugar business is known for its operational efficiency, product quality, and strong market presence. In the refractories segment, Dalmia Bharat manufactures high-quality refractory products that are used in various industries such as steel, cement, glass, and non-ferrous metals. The company’s refractory products are known for their superior performance, durability, and resistance to high temperatures. Dalmia Bharat’s refractory business caters to both domestic and international markets, serving the needs of diverse industries.

Dalmia Bharat’s success is driven by its strong focus on innovation, research and development, and continuous improvement. The company invests significantly in technology and processes to enhance its operational efficiency and product quality. Dalmia Bharat is committed to sustainable development and has implemented various initiatives to reduce its environmental footprint, conserve resources, and promote responsible business practices.

Q4 FY23 Financial Performance

Dalmia Bharat ltd reported Total Income for Q4 FY23 of ₹3953 Crore up from ₹3432 Crore year on year, a growth of 15%. Consolidated Net Profit of ₹608 Crore, up 225% from ₹270 Crore in the same quarter of the previous year. The Earnings per Share is ₹31.39 in this quarter.

Update On Jaiprakash Associates’ Acquisition Of Cement Assets

The company has signed a legally binding contract for the capacity to produce 2.2 million tons of cement at Bhilai and 3.3 million tons of clinker, which includes both Babupur and Jaypee Super. The management is proposing to enter into a long-term lease agreement with a term of 7 years for the Nigrie Cement capacity of 2 million tons. According to the management, the business also has the option to buy the Nigrie unit at any time during the lease period for a price of ₹250 crores. As per the management, “Were unaware of the possibility of acquiring Jaypee when the company announced a capacity expansion plan on April 21 and the first milestone of 49 million tons.”
The industry’s demand for cement increased by 9% to 10% in the previous fiscal year, along with an increase in prices across all of India.

Company’s Road Map For FY24

By FY31, Dalmia Bharat hopes to reach its goal of producing 110 to 130 million tons. Execution, excellence, and financial performance are equally among the company’s priorities. Some of the company’s areas of focus for the upcoming fiscal year FY24 will be:

1) The timely integration of the Jaypee Cement asset and completion of the ongoing CAPEX.

2) Enhance the company’s manufacturing KPIs even more and create long-term input security.

3) Transformation of HR with an emphasis on leadership development.

4) Creating a digitally enabled company.

Analysis Of India’s Cement Industry

In 2022, India produced 298 million tonnes of cement, making it the second-largest producer in the world after China. The industry is expected to continue to grow in the coming years. The cement industry in India grew at a CAGR of 7.2% from 2008 to 2018. The growth rate slowed down to 5.68% from FY16 to FY22. However, the cement industry is expected to grow at a CAGR of 8.98% from 2022 to 2028.

The rising demand for cement is a key factor fueling the industry’s expansion. Demand has been steadily rising as a result of factors like population growth, urbanization, government infrastructure projects, and the ongoing growth of the housing market. Residential buildings, commercial complexes, infrastructure projects, and industrial structures are all built with cement, which is a fundamental building material. The government’s emphasis on programs for affordable housing and the development of smart cities has also increased the demand for cement in India.

The Indian cement industry does, however, also face a number of difficulties. These include the need for sustainable practices, increased energy costs, environmental regulations, and fluctuating raw material prices. Cement production requires raw materials like limestone, coal, and gypsum, and any price volatility in these materials can have an effect on cement producers’ ability to make a profit. The outlook for India’s cement industry is still favorable despite these obstacles. The demand for cement will continue to be driven by the government’s continued emphasis on infrastructure development, affordable housing, and smart city initiatives, as well as the nation’s demographic advantages, urbanization trends, and robust construction activities.