Dalmia Bharat Limited (NSE: DALBHARAT) Q1 2026 Earnings Call dated Jul. 23, 2025
Corporate Participants:
Unidentified Speaker
Puneet Yadu Dalmia — CEO
Aditi Mittal — Investor Relations
Dharmender Tuteja — CFO
Analysts:
Unidentified Participant
Amit Murarka — Analyst
Ashish Jain — Analyst
Devesh Agrawal — Analyst
Ritesh Shah — Analyst
Rahul Gupta — Analyst
Sumangal Nevatia — Analyst
Satyadeep Jain — Analyst
Kunal Shah — Analyst
Jashandeep Singh Chadha — Analyst
Shravan Shah — Analyst
Pathanjali Srinivasan — Analyst
Prateek Kumar — Analyst
Rajesh Ravi — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the earnings Conference. Call of Dalmia Bharat Limited for the quarter ended 30 June 2025. Please note that this conference call will be for 60 minutes and for the duration of this conference call, all participant lines will be in the listen only mode. This conference call is being recorded and the transcript will be put on the website of the company. After the management discussion, there is an opportunity for you to ask questions. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Before I hand over the conference to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward looking statements. These statements are based on expectations and projections and may involve a number of risks and uncertainties such that the actual outcome may differ materially from those suggested by such statements. On the call, we have with us Mr. Puneet Dalmia, Managing Director and CEO, Mr. Dharmindar Tuteja, CFO and the other management of the company. I would now like to hand the conference call over to Ms.
Azi Mittal, head of Inversal Relations. Please go ahead.
Aditi Mittal — Investor Relations
Good morning. Welcome to Q1 earnings call of Dalmia Bharat. We’ve uploaded our results and the presentation on the website. I hope you’ve had a chance to go through it. With this, I’ll hand over the call to Mr. Darmia for his opening remarks.
Puneet Yadu Dalmia — CEO
Thank you Aditi. I will break my opening remarks into five sections. The first section is Economy and Demand. The second section will be Capacity and our expansion plan. The third section will be Prices and future Outlook. The fourth is our cost reduction journey and the fifth is our key priorities. So with that, I start with my first section on the state of the economy and demand. Fiscal 26 has started on a positive note with India surpassing Japan and becoming the fourth largest economy in the world. As the momentum continues, I firmly believe that our country is well on track to become the third largest economy before the end of this decade.
Globally, even though the macroeconomic sentiment has been hit by ongoing trade negotiations and heightened geopolitical pressures, India clearly stands out. As per rbi, the economy is expected to maintain its growth momentum. With GDP expected to grow at 6.5% in financial year 26. The resilience that India has displayed bodes well for the cement sector. And I believe that in financial year 26, the sector should be able to deliver a healthy cement demand growth of somewhere around 6 to 7%. This growth will be supported by strong government spending and a booming housing sector. Having said that, the start to the year has been a bit slower than our expectations with uncertainty from cross border tensions and early arrival of monsoon despite robust spending by the central government on infrastructure.
In fact, the government appears to have front loaded its capex spending 2.2 lakh crore in April and May alone. That’s already 20% of the full year target of 11.2 lakh crore, one of the highest spends in the first two months ever. However, at the same time capex spending at key states like Tamil Nadu, Karnataka and West Bengal declined. Based on current trends, we believe cement demand grew in the low to mid single digits in Q1 of FY26, but we expect it to pick up pace once the monsoon recedes. Now I come to my second section capacity and expansion coming to the supply at the industry level.
In the next two years almost 70% of the new capacity will be added by the top four players which will accelerate the pace of industry consolidation and I believe that this is beneficial for the sector as a whole in the long run. We continue to invest in the sector with a clear vision of becoming a Pan India player as we also believe that entry barriers will continue to rise and the long term returns in the sector will be attractive. Now, as promised, I would like to give a roadmap for our expansion plan. Before delving into it, it is crucial to outline our expansion philosophy.
Our strategic imperatives are twofold one to become a Pan India player and two to establish a significant presence in every market that we operate in. Consequently, our growth strategy focuses on expanding into totally new and untapped regions or increasing capacity in existing areas where we are already operating at high utilization or cater to white spaces in our existing regions. In line with the above, the broad overview of our roadmap is as follows. To start with in February 2025 we have already announced an investment to establish a 3.6 million ton per annum clinker unit in Belgium along with a 3 million ton per annum grinding unit at our existing Belgium plant coupled with a new 3 million ton greenfield grinding unit in Pune.
The Belgium grinding unit will primarily cater to the markets of North Karnataka and Southern Maharashtra while the Pune grinding unit will serve the untapped western Maharashtra market. Second, the board has approved an investment of 3.6 million tonnes per annum clinker unit with a 6 million tons per annum grinding unit at our existing Kadappa plant supported by a 3 million tonnes per annum bulk terminal in Chennai at an estimated capex of rupees 3,287 crore. Our Karappa plant is already operating at high utilization levels and this investment will help us strengthen our presence in Andhra Pradesh, Southern Karnataka as well as northern Tamil Nadu markets.
Third, with the upcoming commissioning of a new clinker line of 3.6 million tons per annum at Umrangshu in Assam, we will become clinker surplus in the Northeast region and we are evaluating the best locations to add additional two to two and a half million tons per annum of grinding capacity which will be a split grinding unit. This can be done within 12 to 15 months of the date of commencement. With these three projects, Delgaon, Kadappa and further expansion supported by Northeast Clinker, we would add 14 to 14.5 million tons per annum of cement capacity and this would take our total cement capacity to around 63 and a half to 64 million tonnes per annum by financial year 28.
Further, we are working on finalizing a new 6 million tonnes per annum greenfield expansion in Jaisalmer to access the North India market. Land purchased for the plant and split grinding units is already almost completed. The mining lease has been executed and the EC is under process. My sense is that if we can break ground between April and June 2026, we can commission the plant by March 28. However, before committing to the Jaisalmer project in north, we would like to wait for the outcome of our bid for acquisition of Jayprakash Associates. All these organic expansion have been meticulously reviewed and are within our defined capital allocation framework.
These projects will be funded through a mix of internal approvals and debt. Now I come to the next section on prices and their outlook. I will briefly touch upon the pricing trends. While the pace of cement demand did slow down a bit, we have seen a very healthy improvement in prices across our key operating regions. The southern region in particular saw a good recovery in prices this quarter, bouncing back from the lows we witnessed last year. In the east, prices largely held steady, maintaining the gains made in the previous quarter. Even with the early onset of monsoon, the spot prices of cement are holding up and are almost at similar level to the Q1 average cement prices.
We remain reasonably optimistic that these prices will hold. As you are aware that we have been consistently working on building our brand equity in the market. We are investing in our brand, deepening our distribution and improving our price position which appears to have started giving results. I believe that our realization improvement in many markets has been higher than the price increase which is visible in our 9% QoQ NSR improvement. This is a long journey but we are happy to see some green shoots and which we hope will keep on building as we go forward. Cost Reduction on the cost side we are consistently working to deepen our cost position as one of the lowest cost cement producers.
We are committed to reduce rupees 150 to 200 per tonne over the next two year period and are working on the identified levers as we have stated earlier. Now I come to the key priorities. I am personally very happy with with the journey that we have achieved so far and I think this is the time to have conviction in the future and increase our investments in India and our people and we are going to do exactly that as we embark on the next phase of our journey. My priorities are very clear. Build capacity for the future, staying focused on our long term goal to become a Pan India player while staying within the guardrails of our capital allocation framework.
2. Deliver profitable growth through doubling down efforts on strengthening our brand equity. This is particularly important to scale up our volumes, improve utilization levels and enhance nsr. We will continue to deepen engagement with our channel, both dealers and sub dealers. We have already streamlined the processes and policies, enhanced the experience of our channel and most importantly boosted the productivity of our own sales force and we intend to continue doing the same. Second, we further want to deepen our cost leadership with investment in building capabilities and improving operating efficiencies and third and most important, we want to build, develop and sustain a strong leadership pipeline and younger team while creating a caring culture within the organization.
I think the best for India and Dalmia is yet to come and I’m very excited about the journey that we are setting ourselves on. With this I want to hand over to our Group Chief Financial Officer Mr. Dharmin Tutela. Over to you Dharmin.
Dharmender Tuteja — CFO
Thank you Puneet. Financial Performance Regarding sales Volume growth first of all I’m very pleased with our performance this quarter as we have delivered the highest ever EBITDA of rupees 883 crores during the quarter. This EBITDA growth is not only supported by the market price improvement in our operating regions but also because we have started to see an improvement in the quality of our sales. Our share of trade sales improved to 68% from 64% last year. Premium product mix also stood steady at 22% during the quarter. Direct dispatch percentage which had been hovering around 55% over last several years has now reached 52% during the quarter demonstrating a significant positive shift.
I believe that we are taking small but steady steps to improve the quality and sustainability of our sales performance and I am hopeful that this journey will continue. Moving on further while our sales volumes degree by 6% YoY to 7 million tonnes. But if we look at the sales From Dalia plants that is excluding the trawling volumes from JP plants last year our volumes remained flattish in Q1 FY26 last year. First quarter was the last quarter when we had the sales volume under tolling arrangement. So from Q2FY26 onwards we will have a clean base for YOY sales comparison, the revenues have remained flattish at Rupees 3636 crores in Q1FY26.
Coming to the cost line items, our raw material cost per tonne of cement Production increased by 8.5% YoY to Rupees 791. This increase was primarily due to the new mineral tax imposed by the Government of Tamil Nadu. On the other hand, power and fuel cost per ton of Cement production declined by 2% YoY to Rupees 981. This was driven by decline in fuel rate from $106 per ton in Q1 of FY25 to $100 per ton in Q1 of FY26. The blended fuel cost during the quarter stood at Rupees 1.33 on per KCAL basis. Spot prices are currently hovering at around $108 per ton during the quarter.
We have commissioned 26 megawatt of RE capacity through OPEX model. This has increased our RE consumption percentage to 41% in Q1FY26 from 35% in the last financial year. The CC ratio also improved from 1.67 in Q1FY25 to 1.71 in Q1FY26. Our logistic cost during the quarter increased marginally by 2% on viva basis to rupees 1135 per tonne though our lead distance increased by about 8 kilometers to 280 kilometers in Q1FY26. But as I mentioned our direct dispatch percentage improved in the positive direction to 62%. Our absolute EBITDA improved by 32% y o y to Rs.
883 crores and EBITDA per ton thus works out to rupees12.61 on per term basis and this is a 40% increase on a yyy basis. Our EBITDA margin during the quarter was 24.3% in Q1FY26 which is a good jump of almost 5.8% from the same quarter last year. During the quarter we accrued rupees 84 crores in incentives. While collections are lower at rupees 42 crores which is typically seen in first quarter of the year, we expect collections to improve in rest of the year. The incentive outstanding at the end of the quarter was rupees 780 crores including rupees 250 crores from the Government of West Bengal Coming to the ongoing expansion projects While Puneetji has detailed out the expansion plan, I’ll give you a brief overview of the ongoing projects.
Our clinical unit at Umrangshu is nearing completion and we plan to start trial runs in September this year. With this, the commercial production should start in Q3 of FY26. This will take our total clinker capacity to 27.1 million tonnes. The supporting GU for this clinker was already commissioned in March 25th at Lanka Assam. The work on the Delkam Pune project is in full swing with all major orders placed. While civil work is under progress, the project remains on track for completion and is expected to come online by the end of FY27. During the quarter we have incurred capex of rupees 612 crores with majority of it being spent on Ramshu Clinker Line and Belgaon Pune project.
Besides maintenance, land and ROI projects for the full year as a 26th we expect our capex spending to be about 4,000 crores. Also, while Puneetji has already mentioned, I wanted to clarify on the Karappa project which the board has approved yesterday, I believe there is some confusion on how it is being shown in our earnings release. The project has a 3.6 million ton clinker capacity in Khalifa along with 6 million ton of grinding capacity in Karafa itself. In addition, we are setting up a 3 million ton bulk terminal in Tamil Nadu to serve the North Tamil Nadu market.
The cement for this bulk terminal will come from Karasa itself. Moving on, during the quarter the company through its subsidiary has sold 3.7 crore shares in IEX. Post the sale our holding in IEX has been brought down to 10.8%. That is about 9.6 crore shares. Our graph debt at the end of the quarter stood at rupees 6,456 crores while net debt was at rupees 823 crores. The resultant net debt to EBITDA stands at 0.33 times. During the quarter we had issued NCDs and raised 950 crores of debt. And I am happy to share that the NCDS were well received in the market.
Even with the ongoing expansion projects, we remain confident of staying below the two times of net debt to EBITDA threshold which was outlined in our capital allocation framework. Before we open the call for question answer, I want to clarify on a couple of legal points. As you are aware, the West Bengal government has enacted the Revocation act on 2 April 2025. The Revocation act revokes and discontinues the incentive schemes retrospectively from the date of implementation of the respective schemes. Accordingly, the order of the honorable Calcutta High Court directing release of incentives amount to us will be adversely affected.
The company has been legally advised that we have a good case to challenge the virus and constitutional validity of the Revocation Act. The company will take appropriate legal recourse to protect our interests. Second, there was a news report regarding the encompass authorities seeking to reopen the income tax assessment for the financial year 2011. We have already filed specially petition before the Honorable Supreme Court first one to which an interim stay has been granted by the court. We believe the department’s case is unsustainable. With this now, I open the floor for questions. Thank you very much.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Ahmed Muraka from Access Capital. Please go ahead.
Amit Murarka
Yeah, hi. Thanks for the opportunity. So my first question is on volume and market share. So like you have been flat yoy even if I exclude the volume of tolling last year so and I generally the understanding is south and east markets did well in Q1 versus last year. So could you just talk a bit about the market share losses and how are you planning to arrest it?
Puneet Yadu Dalmia
I think you know the story is not same across all states. There are as I said in my earlier remarks in the last earnings call that our priority is to balance volume growth and profit margins in each market. And I think you know that strategy is paying off great dividends. We have improved our price positioning in many markets. We have improved realization growth better than what the industry has done with respect to the rebounding of the prices and we think that we will continue with this strategy where we will improve the quality of sales and we will ensure that we achieve profitable volume growth in the coming quarters.
So I think overall I’m absolutely delighted with the progress. Our brand is getting stronger, our distribution is getting deeper and our sales productivity is improving. I think the same approach will be done on a granular basis, market by market in the coming quarters. Thank you.
Amit Murarka
Sure. And just a question on production. It seems like there is, I mean there is inventory sitting at the end of the quarter. So how much really was the production and what is the inventory sitting at the exit? Exit June.
Puneet Yadu Dalmia
Just build up of the inventory typically happens every first quarter because by the end of the year typically entire industry they are able to sell all their stocks from the plants as well as the. And that gradually builds up in the. First quarter and it remains flattish during Q2, Q3 and Q4 again it gets released. So that is typical. It’s a seasonality effect. It’s nothing unusual.
Amit Murarka
This year the number is big in. PNL which is why asking
Puneet Yadu Dalmia
sure. The same season slightly higher than the bio wide. I think it’s about 100 crores also.
Amit Murarka
I’ll come back in the queue. Thank you.
operator
Thank you. The next question comes from the line of Ashish Jain from Macquarie India. Please go ahead.
Ashish Jain
Hello.
Puneet Yadu Dalmia
Yes Ashish, please go ahead.
Ashish Jain
Hi sir, good morning. First question is you know is on expansion like you know we are currently guiding for roughly 62 million tons on in March 27th aspiring to 75 by 28. And still we are saying that Jaisalmer is dependent on JP acquisition. So JP will not be adding so much capacity. How are we thinking about capacity? Firstly and secondly, even if I add vessel, Mayer and JPL both happen still the visibility for 75 is actually quite low at least to me. And just speak a bit about you know, capacity.
How are we thinking and why are we so hesitant if you know in terms of going all out on addition?
Puneet Yadu Dalmia
I think first of all we are not at all hesitant. I think you know we are going all out to, you know develop the projects and as I said the we can press the button on construction in the first quarter of next financial year in Jaisalmer. That will still give us time to commission this project by March 28th. The JP acquisition whether is under process and I think there are several scenarios which can play out. As you know There is a 5 million tonne clean asset with JP Reva and Chorkian Chunal and then there are two other, you know options here.
One is BJCL which was a joint venture with Steel Authority of India in Bhilai. And there is a, you know, arbitration going on with ultratech for a cleanca plant in UP. So KP is minimum 5 million tonnes of cement and it could be greater than that depending upon how the other two play out. So I think we are absolutely not stopping in any way. All we are saying is we will review the position. I mean in any case, we can’t press the button on Jaisalmer today. We are taking all effective steps. Steps. Land purchase is done, mining lease is done, environment clearances in process.
And we have to review the situation in March 26th which still gives us enough time to complete the project by March 28th. So I think we just want to remain flexible and we are just absolutely not tentative. We are just going all out to develop projects. In fact, we are even developing projects for our next phase which will take us to 100 million plus by financial year 31. So I think developing projects and creating a state of readiness for our capital expansion pipeline so that we can deploy capital organically is in full swing in the company.
But we want to be just flexible to see what happens and take a call once a major acquisition like JP plays out fully.
Ashish Jain
Secondly, can you just, you know, differentiate between growth in south and East? I know normally we don’t share it but you know, even, even Amit asked this question. Given the divergence between what we have reported, even if I adjust for jpa, it looks quite surprising. So is it possible to give some color in terms of where we have been more cautious on market share versus margin, you know, strategy?
Puneet Yadu Dalmia
I don’t think we can give that granular, you know, share that granularly. All we can say is that, you know, there are markets where we want to prioritize margins. There are markets where we want to prioritize market share. And I don’t think we would like to reveal our state by state strategy on this call.
Ashish Jain
I’m just asking. East versus south street by state is not what I’m looking for.
Puneet Yadu Dalmia
It’s like we also don’t want to reveal our region wide strategy.
Ashish Jain
Thank you so much.
Puneet Yadu Dalmia
Thanks.
operator
Thank you. The next question comes from the line of Divesh Agarwal from IIFL Capital. Please go ahead.
Devesh Agrawal
Yeah, thank you for the opportunity, sir. Firstly, just wanted to understand you are putting up more capacities in south and you said that the utilization levels are higher. So what is the difference between your east utilization versus south utilization? If you can give some sense on that.
Puneet Yadu Dalmia
I just said that we don’t share region wise data and I think we will continue to maintain that in terms of difference.
Devesh Agrawal
Also whether there will be a 10, 20%, 10% difference between the utilization between the two regions, that will also help to get us some idea.
Puneet Yadu Dalmia
Well, if you ask that question in three different ways, we are not going to reveal our region wise utilization or a state by state or region by strategy. Thank you.
Devesh Agrawal
No problem, no problem. Secondly, sir, you said in terms of branding exercise you have seen improvement in realization better than what the price hike has been. So just wanted to understand better what is the current gap that you have in each region of basically on overall basis also and what is the target to narrow that and how do we achieve this?
Puneet Yadu Dalmia
Can you please repeat this question? I didn’t understand this.
Devesh Agrawal
No. So I’m saying you did mention that the increase in the MSR for us has been higher than the price increase in those regions. Right. So basically there would have been some gap in terms of pricing between us and some of the other brands. So I wanted to understand what is the gap at this point in time and what is the target to narrow that gap to and how do we intend to achieve that?
Puneet Yadu Dalmia
I think again this depends. You know, there is a difference state by state and even in terms of the different brands that operate in each state. So I would just say that we want to be the top price brand in every state possible and it is a journey, it’s going to take time. We also don’t want to do sale with low margins, even if that means that in the short term we have to hold back and do higher quality sales. But I think in the long term that is a better strategy to follow and we want to operate in those customer segments which give us better margins.
So I think this is a broadly in the trade segment we want to improve price positioning in some of the markets where we are weak, in some of the markets where we are strong, we want to continue to print, premiumize our product mix. And even within non trade which is the institutional segment, we will choose our market segments carefully to improve the quality of sales. So I think it’s hard for me to quantify right now as to how much is the further spread that’s possible. But I can say that overall, with continuing to deepen our cost leadership and improving our nsr, we should be able to deliver, you know, top decile EBITDA per ton in the industry.
I mean, you know what, I think that’s our endeavor.
operator
Thank you. Which is the next question from the line of Ritesh Shah from Investec. Please go ahead. If you can please unmute your line. Yes, please go ahead.
Ritesh Shah
Sorry for that. Thanks for the opportunity. Sir, a couple of basic questions. At the start of the call you indicated our endeavor is to go on a Pan India basis. Now we have just announced something which is more in south and to some extent in Western India including Pune. So the question is why didn’t we decide to go for the Rajasthan optionality that we have versus what we have just announced?
Puneet Yadu Dalmia
I think I made it very clear in my call that our overall strategy is to deliver a Pan India is to create a Pan India footprint while creating significant presence in each of the markets that we operate in. So I think we are not going to choose one or the other. I think I also made it clear that our Kadappa plant is operating at high utilization levels. So it is important for us to continue to deepen our presence in southern, in northern Tamil Nadu, southern Karnataka and Andhra Pradesh. And we are developing projects in regions that we don’t operate in.
So we spoke about Jaisalmer, we spoke about JP which is central India. So I think we are looking at all of this in a very holistic manner and both the things in terms of Pan India footprint as well as significant presence in our existing markets are important to us.
Ritesh Shah
Sure. Second related question. I think EDK did come up with a notice. I understand it’s a provisional attachment with respect to kadappa limestone around 417 hectares. I understand it’s a provisional attachment. We would have challenged it. Do you think this is any form of risk or is it something that we should just forget and go ahead? The reason to ask is we have existing operations and we have just announced incrementally also expansions over there. So in that slide, how should we look at this particular variable?
Puneet Yadu Dalmia
I think you know, as you said, this is a provision attachment. We have challenged it and we think the case is unsustainable. We do not see any risk in terms of expansion or in terms of mines. We have been operating this for the last 14 years and there has been literally no issue. We don’t foresee any risk with respect to disrupting the operations.
Ritesh Shah
Just last question. I think in the earlier remarks you did indicate that our focus has been on sales productivity. However, if one looks at the annual report over the last four years, the discounts, what we have given in the marketplace has effectively doubled and it’s nearly 1,200 rupees per tonne. How should we understand our marketing strategy and this number of 1200 rupees per tonne, which is quite high.
Puneet Yadu Dalmia
I think this is exactly the point I made. You know, there are markets where we have made sales on lower margins. There are markets where, where we have to improve our quality of sales, we have to improve our brand positioning and we have to increase, deepen our distribution. And that is exactly what we are doing. And that is why I said the green shoots are starting to be visible this quarter and hopefully they will continue in the coming quarters. So this is a long journey. The journey has started and I am happy with the progress.
As regarding the high level of discount which you pointed out, let me also clarify that last year the industry tried to increase the prices but most of the times they were not holding and they had to be given back as discounts. So particularly this pride increase but not made effective and to be considered by the discount also shows up in the discount which you see in the annual report.
Ritesh Shah
Right. Just a follow up. Puneet, how do you look at this number of discount versus the net pricing? Effectively it is a cost to the company. So is it something that you put it as a KRA for your sales and marketing folks that this number should actually decline which will propel effectively a good industry wide practice as well?
Puneet Yadu Dalmia
I think, you know, this is a issue which we are looking at on, you know, what is the best way to, you know, streamline this because this is area which requires, you know, deeper deliberation. And I don’t think there is an easy answer for this. There is a industry behavior issue and we are operating in a very competitive environment. And you know, depending upon how the overall, you know, conduct is, I think we have to examine how we, how we operate. So I think in a competitive environment some of these things happen and in this industry the pricing is a little bit opaque and I think how do we bring more transparency in? Pricing is a constant endeavor that we are trying for and in some markets where we are strong, we are able to take tough calls.
But in markets where we have to build stronger distribution and our brand is weak, we have to know, work harder to, you know, build strength and then, then we can, you know, do this. So I think it’s a journey and I feel that over time, you know, there’ll be more transparency around this.
Ritesh Shah
Sure. Thank you so much for the answers. I’ll jump up with you.
operator
Thank you. The next question comes from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Rahul Gupta
Hi, thank you for taking my questions. I have two questions. One, we have seen strong pricing environment during the Quarter. Right. And to some extent this has sustained in July as well. Now this has happened in the midst of relatively weak demand environment. How should we look at this? Are we seeing pricing discipline in the industry and moving away from competitive environment? This is just a near term phenomena and we may see increased competitive environment once we move out of monsoon. So any color on this will be very helpful. That’s my first question. Thank you.
Puneet Yadu Dalmia
What’s your second question?
Rahul Gupta
My second question is. Sure. So my question, my second question is the strategy is now to focus on profitable growth going micro markets as well. Now assuming industry grows at 6, 7, 8% for multiple years and given Dalmia’s low utilization levels, are we in a way moving away from 75 million ton and 110 to 130 million ton capacity targets from here? Thank you.
Puneet Yadu Dalmia
Okay, so I think, let me first. Take the pricing issue. I personally think that as I said earlier, at the current margin levels no new capacity creation is viable. So our belief is that as consolidation happens it will boost pricing power in the industry and the margins will become respectable to give a good return on capital employed. This has happened in every sector and we’ve also seen that the top players are taking disproportionate share of the growth. So I am convinced that the entry barriers are rising and the margin profile of this industry and the return profile of this industry is going to get increasingly attractive in the future.
Now having said this, there will be blips along the way and this is not a linear curve. There will be times when you will make low utilization, low return on capital. There will be times when you have low utilization but very high return on capital because prices are good. And I think we should not get swayed by quarter on quarter volatility in this sector. I think we have seen in the last 80 years that the best strategy to create value in this industry is to take a long term view and invest. And the way you make money is to invest when people are not investing and also to ensure that your cost of capital is low and leverage is under control.
So I think we will continue to invest in this sector with a deep conviction that India will do well and consolidation will increase and pricing power and pricing discipline will return in the sector. That view is unwavering quarter on quarter and that view will not change. Even if we perform well in one quarter or if we perform badly in one quarter, our long term strategy will remain the same. We want to focus on a micro market by market, micro market and decide margin versus market share trade off and we will ensure that we will invest in markets to create significant presence and diversify across Europe.
So I think my strategy, my conviction, my answer will not change every quarter depending upon our performance. It is the same depending. We have deep faith in India, we have deep faith in the returns that the sector is going to offer and we have deep faith in our execution capability. Now coming back to one point on short term prices, I think currently the prices as I said had gone to unsustainable levels and prices are bouncing back. I personally feel that at least in the near term I’m quite optimistic that these prices will hold. But having said that, this is a cyclical business and there are times when prices will be volatile so it’s hard for me to predict quarter on quarter what will happen.
But the volume way I see the situation now is I’m quite optimistic that the practice will work. Thank you.
operator
Thank you. We take the next question from the line of Sumangal Navatia from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, good morning everyone. So my first question is on the GPA bid. Just want to understand what would be our plan for the non core or sorry, non cement effects which comes as a combination and also from our interaction with CoC. I mean what sort of timeline are we looking at for this resolution?
Puneet Yadu Dalmia
Mangala, I’ve already said this. You know we are a pure play company and we want to, you know, look at the cement business in a very strategic manner. And I think as far as the CoC concern is concerned, I understand that, you know, they are going to review it this week and then they’re going to give us, you know, a better sense of the timeline. But based on our interactions, although they’ve not given any form date, this is they want to find an early resolution to the whole process.
Sumangal Nevatia
Understood, Understood. My second question is on the timing of this announcement of expansion. Now given that we are operating at almost 60% utilization at the company level, looks like we have headroom for few years to grow. Won’t we be better off going for expansions once we start approaching 70, 75% utilization given the capital also has an opportunity cost?
Puneet Yadu Dalmia
As I said, you know, our utilization is not same across all regions and you know we have to take a more granular approach. Point number one. Point number two, it takes time to build new capacity. I think we were behind the curve in acquiring land, obtaining permits and obtaining mining leases. You know, we think that, you know, we want to be in an absolute state of readiness and you know, if we are within our capital allocation framework, we Want to invest in in this sector with a clear conviction that India will do well and consolidation will increase in this sector.
So I think we are within our capital allocation framework and I think we’ll continue to sweat our existing assets too. It doesn’t mean that we are not going to sweat our existing assets and keep expanding just for the sake of nameplate capacity. That’s not our intent. Our intent is to create profitable growth and get returns on the capital that we invest.
Sumangal Nevatia
Got it. Makes sense. All right, thank you so much.
operator
Thank you. The next question comes from the line of Satya Deep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi. Thank you for your opportunity. First question, I know the question everybody’s asking and you can stand, you can sense the confusion that this is creating. Just want to delve deeper. Historically Banvia was focused in a way on market share. If you look at the history last then it tried pricing discipline. Lost market share a few quarters ago. There’s been change in management last two, three quarters. We’ve seen market share loss but we’ve seen pricing improvement. So a to this question, what have you specifically done to improve this price positioning? Are you vacating some markets? That’s what the impression you’re getting.
Non profitable markets. What specifically are you trying to do to improve brand positioning? Because the brand has been out there for a long time, suddenly in two, three quarters, what steps have you taken to improve brand positioning? And to this question, because you’re adding a lot of capacity, then the amount you’re investing in this brand creation, brand positioning and then you have to change volumes again with this capacity. Do you dilute this again? How does this entire strategy tie to what you’re trying to do? Is the confusion I guess everybody has right now.
Puneet Yadu Dalmia
I think you should speak for yourself. Don’t talk for everybody. That’s my request and I think if you have confusion, I will clarify it. Once again our strategy is very, very clear. I think we will continue to invest with a great mandate, with a clear vision that India will do well and consolidation will increase. Point number one. Point number two, I think there are markets where we think we are, there was unprofitable segments that we were operating in and we don’t want to operate in those segments as of now. I think we want to be very clear that we have a different strategy for every micro market and we will ensure that that strategy plays out and we balance growth and we balance profitability.
Point number three, I think there are times when just creating discipline in which segments to chase what leeway to give on discounting strengthens the brand and I think we are just following that. You can do that fairly quickly if you, you are disciplined about it and you have a clear thinking around it. So I think this is what we have done and I think we are seeing that early results are visible. So if it means making some trade offs in terms of unprofitable segments, we will make those trade offs because it is in the long term interest of the company.
And I think just giving more discipline in distribution improves brand positioning because otherwise distributors cut each other out and they dilute your brand. So customer brand can be very strong but you know, distributors can just dilute the brand because you know we don’t enforce discipline on them. So I think that is exactly what we are doing in the market and you know, we are engaging deeper, we are giving clear messages and we are very focused on what we are trying to do.
Satyadeep Jain
Can we expect maybe growth, volume growth in line with industry or higher than industry and same at the same time the focus on profitability. So that can be something that we can expect a combination of both profitable growth and volume growth in mine or above industry?
Puneet Yadu Dalmia
I think long term, yes. Short term, you know, I think we’ll have to make a balance.
Satyadeep Jain
Okay, second question will be on the Capex decision just for the sake in between various pockets in north you had option between Jaisalmer and Navalgad which seems like you’re pressing Jesse Mace and obviously the premium that you paid and for Navalguard the premium in Chandu was very high. So does it mean that at this stage Navalgar looks less feasible in that given there is a timeline for that mine to commission after the lead execution would there be a risk of some of these leases going away and then the entire looking at 18, 20 million ton of the expansion in the next 2, 3 years would there be any risk just maybe don’t have any more prudent to layer it rather than doing all at the same time just from an execution balance sheet standpoint.
Trying to understand.
Puneet Yadu Dalmia
I think I again, I can say it again. You know we have said that, you know 64 million tons is something which is firm. We can, we are going to look at how JP plays out and we are going to be in a state of readiness for all projects and we’re going to take a call by March 2026 on whether we should press the button on Jaisalmer or not. I think we have led and we have created scenarios which manage risk fairly well. In my view. We’re going to review the Situation. Every quarter we’re going to see how JP plays out.
We want to see how our execution plays out. But we want to remain in a state of readiness.
operator
Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to one question per participant. We take the next question from the line of Kunal Shah from Dam Capital Advisors. Please go ahead.
Kunal Shah
Yeah. Hi sir, just a couple of questions. Number one on the Jaisalmer project, could you just provide some insight on how much capital is already committed here and how crucial would be the government subsidies before committing capital further capital to that particular area. Given the long lead distance to target markets and potential higher capex cost at the outset.
Puneet Yadu Dalmia
I think we cannot comment on that right now. I think we will comment on that once we are ready to announce the project.
Kunal Shah
Understood. And secondly on the Kadappa capex, you know, the grinding of 6 million ton at Kadappa and the bulk terminal of 3 million at Chennai. Now could you explain this strategy? Just want to holistically understand versus let’s say putting up a split grinding unit in down south Tamil Nadu. Especially given the integrated expansion at Tamil Nadu is some time away until we see developments at the auction there.
Puneet Yadu Dalmia
I think we examined this very carefully whether we should put a grinding unit in Chennai or we should put a grinding unit in Chennai. I think from an economic standpoint we think it is better to put all grinding in Kadaka and just do a bulk terminal in Chennai. Because we want to balance capex as well as servicing the market. And we think, you know, this was a more economically viable proposition.
Kunal Shah
I have question but will fall in the queue. Thanks.
operator
Thank you. The next question comes from the line of Jashanteep Singh Chadha from Nummura. Please go ahead.
Jashandeep Singh Chadha
Hi. Thank you for the opportunity. First of all, congratulations on very good set of numbers. Just two questions. Firstly, I think the cost saving of 150 to 200 per ton we have. Dalia actually announced it last year. So just wanted to understand has some cost saving come till now or is it, you know, if you can directionally tell us, you know, I understand it will be very difficult to quantify it. But some cost saving that might be coming in the near coming quarters and in which, you know, key heads it will be. My second question is, you know, I understand going to Kadabba because you have higher life of mine and lease life there makes sense.
But just wanted to understand and thinking out loud that the reason, one of the reasons for waiting for jp could that also be that you know Dalmia has already made inroads in that central relatively newer market because of tolling and also you get you know auction, auction fee. So there’s no premium on the, you know, central limestone. Whereas for decimal you have around 12, 15% of auction premium. Can that also be one of the conditioning, you know, scenarios that you played up? Just two questions from my side. Thank you.
Puneet Yadu Dalmia
Thank you. I think you know we had said that you know from a quarter one of financial year 25 it’s a three year journey to reduce cost by 150 to 200 per ton. I think we are in the process of doing work so that we can demonstrate this cost saving. It is not visible till this quarter but we are doing work on renewable energy and some of it is going to be visible in the H2 of the this year. And also some of the logistics optimization is also happening and I think that also will start to play out, you know by the fourth quarter of this year till the next year.
So that is question number one. I think point number two on jp I think it just accelerates our entry into the market. Auction price premium is one issue but overall I think we want to build a pan India footprint and it is in line with that strategy.
Jashandeep Singh Chadha
Understood. Thank you so much.
operator
Thank you. The next question comes from the line of Shravan Shah from Dalit Capital. Please go ahead.
Shravan Shah
Hi sir, most of the things has been answered just to understand in terms of the capex so if you can help us breakup first on the Assam Omega how much out of the originally announced 3640 odd crore how much is already spent till 11 QFY26. At the same time on the bill gao how much we have already spent. So I wanted to understand in terms of the 4000 crore capex and maybe for FY27 even if we don’t assume diesel Mayer or JP how much more capex that is one can pencil in for FR27.
Aditi Mittal
For umramshu we’re almost done. The trial run of the Umramshu clinker will start by September this year. I think we should have somewhere with a number between 600 to 800 which will probably get booked this quarter. This fiscal as far as umrant is concerned on Belgium again because most of the capex will be incurred by about Q4 27. The number should be closer to 1400-1600 on Belgium this year. And again of the total capex which DT has said of 4,000 crore during the fiscal approximately 75 to 80% will grow and go into the announced growth projects and also procuring land for our future pipeline.
Shravan Shah
And then for FY27 would be for existing whatever we have announced what would be the capex including the RE and the maintenance.
Aditi Mittal
So the balance 20% which I just mentioned will be towards RE maintenance, capex and all other revenue ROI improvements that we’ll be doing across the plant for next year. The capex number should be something similar to a 4000 again again in FY27 approximately 70 to 75% will again be growth capex and balance will be for maintenance, star wide renewable power, etc.
Shravan Shah
Okay, got it. And is it.
operator
Please join back the queue. Thank you. We take the next question from the line of Patanjali Srinivasan from Sundaram Mutual fund. Please go ahead.
Pathanjali Srinivasan
Yeah, I have a couple of questions. One is our marketing spend is reduced year on year from 24 to 25. So is there any change in strategy. That we are doing here?
Aditi Mittal
No, nothing really.
Puneet Yadu Dalmia
There was also brand launch, so there was a one time brand launch. It’s continuing the same thing. And going forward of course as we deepen our brand leadership this also will slightly go up.
Pathanjali Srinivasan
Okay. But prior to that I think we were spending almost like 7580 rupees per. Ton on a year on year basis for marketing but it’s declined to almost 50 rupees. So I just wanted to understand if we are spending more in any other way for advertising or in terms of the dealer REITs.
Puneet Yadu Dalmia
Now the focus has slightly shifted on the BTL expenditure closer to the markets. Rest all I think when the brand was launched there was more of ATL on the cycle sponsorship shift. Those things are shifted towards btl.
Puneet Yadu Dalmia
Okay. Okay, thank you.
operator
Thank you. The next question comes from the line of Pratik Kumar from Jeffries. Please go ahead.
Prateek Kumar
Hello. Yeah, good morning. A couple of questions. Firstly just for morning, a couple of mind on your net debt positions of some current 800 crore including the three projects which I’ve talked about before, projects excluding the Celman, where do you see your net debt position from 800 crore currently? And second question is on, on the expected FC like sort of when the JPA bit, what is the expected cash. Outflow which you expect from. I mean that bit.
Puneet Yadu Dalmia
So with the current announced projects that debt should go up to about 5,000 crore or so which should not be concerned within our capital allocation policy for jp. Of course we’re not able to comment right now until the metric is closed with the CoC because there could be timing issues. Also how the money gets paid. So when, if at all, when it comes, we’ll do the proper announcement and give you four more data. Sure. Thank you.
operator
Thank you. The next question comes from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Rajesh Ravi
Yeah. Hi, sir. Good morning. My question pertains to this Northeast expansion. And also first on the Northeast expansion, what sort of incentives these plants, the grinding unit and the upcoming tinker unit, bring with them? On the capex, we had 2200 percent of the incentive on your total fixed cost investment, and that is for 20 years. Okay. So on an annual basis, how much would that work out?
Puneet Yadu Dalmia
Sorry, can you repeat that on annual.
Rajesh Ravi
Basis, what sort of incentive one can, you know, could potentially accrue from these plants? You should see the macro level. What we see, what, 100 rupees per ton for the company as a whole, rather than getting into the project specific per term basis. Okay. And would you repeat the incentive numbers accrued and collected in this quarter?
Puneet Yadu Dalmia
It was 82 crores accrued and 42 crores received.
Rajesh Ravi
Okay, 82 and 52. Okay. Yeah, I think that’s all from my end.
operator
Thank you. Thank you. Ladies and gentlemen, we take the last question from the line of Nasheed Chopra from City Group. Please go ahead.
Unidentified Participant
Thank you. Sorry if I missed this. I got disconnected. But have you given any guidance for volume for this year?
Puneet Yadu Dalmia
We don’t give volume guidance.
Unidentified Participant
All right. And second is at what point would you start using auction limestone?
Puneet Yadu Dalmia
So, Rashi, now that we’ll be expanding into the newer regions, the auction limestone will probably start coming into play. Because Jaisalmer will be an auction mine as and when we develop it and on our existing plant as we augment in future. But currently we’re using most of our limestone. In the next two, three years, there’s going to be very little option limestone. So I think it’s not going to move our cost curve at all. You know, three, four years later, you know, there’ll be a marginal shift, but it’s not material.
Unidentified Participant
And what’s the premium for the JFL nine lines?
Puneet Yadu Dalmia
I don’t remember. I think we’ll give it to you.
Aditi Mittal
Give it to you later after the call.
Unidentified Participant
Okay, no problem. Thank you.
operator
Thank you, ladies and gentlemen. With that, we conclude the question and answer session. I now hand the conference over to Mr. Puneet Dalmia for closing comments.
Puneet Yadu Dalmia
Once again, I just want to thank you all for your interest. I think I’m very happy that this was, you know, the best quarterly EBITDA ever for the company. We are very confident. You know our plans and I think staying within our capital allocation framework. And as I said, you know, the best of India is yet to come. And the best of Dalmia is also yet to come. Thank you for your interest. Bye.
operator
Bye. Thank you on behalf of Dalmia Bharat limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines. It.