Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Dalmia Bharat Limited (NSE: DALBHARAT) Q3 2026 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Prasanna Goyal — Investor Relations Lead
Puneet Dalmia — Managing Director and Chief Executive Officer
Dharmender Tuteja — Chief Financial Officer
Analysts:
Jashandeep Singh Chadha — Analyst
Unidentified Participant
Indrajit Agrawal — Analyst
Amit Murarka — Analyst
Ashish Jain — Analyst
Satyadeep Jain — Analyst
Shravan Shah — Analyst
Rahul Gupta — Analyst
Prateek Kumar — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the earnings conference call of Dalmia Bharat Limited for the quarter ended 31 December 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 a Touchstone phone.
As a reminder, all participant lines will be in the listen only mode. 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 not 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 Dalmia Bharat Limited Mr. Dharmendra Tuteja CFO Dalmia Bharat Limited Mr. Yatin Malhotra CFO Dharmiya Bharat Limited and the other management of the company. I now like to hand the conference over to Mr. Prasanna Goyal investor Relations Lead. Thank you and over to you.
Prasanna Goyal — Investor Relations Lead
Thanks Rutuja. Good evening everyone. Thank you for joining us Today on the Q3FY26 quarterly earnings call of Darmia. Bharat Limited we published our results and. Investor presentation couple of hours back and I hope you had a chance to go through it. We have the tag View Management here. With us today to answer your questions. I will now request Mr. Puneet Almiya for his opening comments. Thank you.
Puneet Dalmia — Managing Director and Chief Executive Officer
Thank you Pratham. Good afternoon everyone. Before I begin I would like to wish everyone a warm and prosperous new year. I will first begin with my thoughts on the general Indian economy. The Indian economy has demonstrated strong resilience despite the geopolitical headwinds and registered a gdp growth of 8.2% in the Reserve bank of India is predicting India’s gdp growth at 7.3% in the current fiscal. We have become the fourth largest economy in the world and will continue to hold our pole position as the fastest growing major economy.
I am personally very excited about the India growth story and we take pride in being an integral part of it. Cement sector Talking about cement Continued government investments in infrastructure and capacity building is expected to support cement demand over the medium to long term. This is also encouraging us to step up our investments in the cement sector as we work towards our strategic goal of becoming a Pan India player in the current environment. We have started witnessing improved demand traction with the withdrawal of with the end of monsoon and the festivities.
According to estimates, cement Demand during quarter three grew at about 7 to 8% on a YoY basis and I believe this momentum will continue in quarter four as well. At this pace, FY26 will witness a growth of about 6% YoY on a full year basis. Moving to prices we saw healthy increases at the beginning of FY26. GST reduction in September was a key milestone for the Indian cement industry and benefits were duly passed on to the consumers. Q3 saw softening of prices beyond GST cuts, especially in our key operating regions of east and South.
Though Q4 has started with some improvement, we will see how prices pan out in the coming months. As I mentioned earlier, pricing in the short term is difficult to predict due to various market dynamics. However, I remain optimistic that prices should be supportive going forward in the mid to long term. I would now want to spend some time on Dalmia’s operating performance in Q3. Generating shareholder value by delivering profitable growth remains our topmost priority. We are focused on driving it through sustained improvement in revenue and deepening our cost leadership.
In quarter three we delivered a robust volume growth of 10% versus last year. This growth was driven by focused efforts of our sales team to deliver superior value proposition to our customers. Supported by improved demand traction, we have been making consistent efforts to deepen our channel engagement. We recently hosted our annual dealer conferences and we have received very promising feedback from dealers. This is an encouraging sign and it reinforces our belief that we are on the right track regarding cost.
We remain steady on our path to deliver cost takeout target of 150 to 200 rupees per tonne that we spoke a few quarters back. We have made meaningful progress in our journey by delivering efficiencies across the value chain and there are more initiatives in the pipeline. I believe that this focus on cost will keep us in good stead to maintain our position as one of the lowest cost cement producers in India. Now let me talk about our expansion plans. I’m happy to share that we have started commercial production from the new clinker line at Umrangshu in Assam with a capacity of 3.6 million tons of clinker per annum.
The 2.4 million ton per annum grinding capacity in Langa was already commissioned in Q4 last year. This makes us fully clinker back to serve a total of 8 million ton cement capacity in the region. Northeast as a region has been very promising in terms of demand growth and offers one of the best profitability among the regions. Our focus now is to ramp up this capacity quickly. Our Belgam Pune expansion as well as the Kadappa expansion are progressing as per schedule. We have placed all the major orders.
Civil work in Belgium is also in full swing. These projects will take our capacity to 61.5 million tonnes. As informed earlier, we are on the path to expand our presence in the new regions in new regions and reach a capacity of around 75 million tonnes by financial year 28. We are developing the Jaisalme project and are likely to firm up our decision in the next few months. In parallel, we are working on various other projects in preparation to reach our stated long term ambition of 110 to 130 million tonnes by 2031.
To conclude, I must say that I believe we are making very positive strides in our journey amidst promising times when prospects of long term demand remain strong, industry consolidation is accelerating and the potential for margin expansion is significant. I’m confident that as a company we are well positioned to capture the tremendous opportunity that lie before us. Thank you and over to you Dharmender for the financial updates. Thank you. Puneeji.
Dharmender Tuteja — Chief Financial Officer
Let me give an overview of financial performance. As Puneeji mentioned, our performance for the quarter was continued to be guided by profitable growth. During the quarter we witnessed a sales volume growth of 9.5% y o y to 7.3 million tonnes. Our trade share stood at 62% while premium product share was at 23% during the quarter. Revenue for the quarter improved by 10% on a YUI basis while prices were marginally higher on a YUI basis. It corrected in our core markets sequentially. This led to NSR drop of about 4% on a QoQ basis.
As called out last quarter with the change in GST regime, our incentive run rate has also come down. During Q3 we have accrued incentives of rupees 91 crore. This figure includes certain incentives mounting to rupees 37 crores pertaining to earlier years and rupees 9 crores for H1 of FY26. During the quarter, our receipt of incentives was rupees 121 crores with which our total outstanding incentive declined to rupees 776 crores. As mentioned last time, we expect the incentive run rate to be around Rs.
200 crores next year. Coming to the cost line items, our raw material cost per ton of production increased only by 2% YoY to rupees 780 per tonne despite the additional levy of tax on minerals Tamil Nadu. Further, our power and fuel cost per turn of Production increased by just 1% by 2 rupees 1019 per ton. Despite the cost headwinds during the quarter, we have achieved re share of 48% on consumption basis. Our cost efficiencies will continue to improve with the rising share of renewable energy in our consumption mix.
We have commissioned 23 megawatt of re capacity this quarter. With this, our total RE capacity has reached 410 megawatt in nine months. We have invested about Rs. 50 crores in equity SPVs for the group captive RE projects. There are more projects in the pipeline which are expected to come online in the next few months. During the quarter our blended Petco and coal consumption cost has remained range bound at about $99 per ton on a Q O Q basis. Blended fuel cost during the quarter stood at rupees 1.36 on per kilo calories while CC ratio was 1.6 times.
Our logistic cost during the quarter saw a significant decline of 5.6% yoy thanks to good progress on our various initiatives. Our direct dispatches Percentage stood at 62% this quarter while lead distance was at 277 km. Other expenses during the quarter increased by 11% YY to Rs 579 crores primarily due to planned shutdowns and increase in marketing spends. During the quarter the company hosted its annual dealer conference and was one of the major sponsors of the Messy India tour among other initiatives.
As Puneji mentioned, we’ll continue to strengthen our position as one of the lowest cost cement producers. In one of the slides of our earnings release, we have included our total cost spend excluding the two major external headwinds that affected us, that is additional levy of mineral tax in Tamil Nadu at rupees 160 per tonne and spike in fuel prices clearly shows that we have reduced our sectional cost within last few quarters through better operational efficiency across levers. Our EBITDA per ton stood at 823 per ton while absolute EBITDA was at rupees 602 crores.
This is an improvement of 18% on Y as you are aware that the Government of India has recently notified the new labor codes. Consequently, we have assessed an incremental impact of these changes amounting to rupees 32 crore towards graduate and other employee benefits. This has been provided under exceptional items. During QR3FY26 we have incurred a capex of about 113 crores which makes YTD December spending to be rupees 1703 crores. We expect the funding to be around rupees 27 crores in FY26. Majority of the CAPEX in current year is being spent on Umramshuklinkar, Delgam, Pune units and Karapa project along with the other land acquisitions and other ROI projects.
Our gross debt at the end of the quarter stood at Rs. 6,844 crores while net debt stood at 1,703 crores. Our balance sheet position remains strong with our net debt to EBITDA at 0.6 times. Just to summarize, we saw good volume, good volume growth and stable costs in quarter three. Our drop in prices led to margin suppression during the quarter. As we look forward to quarter four, we expect positive momentum to continue on demand whereas margins are likely to get supported with better prices. With this I open the floor for question and answer.
Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Nishandeep Singh Chadha from Nomura. Please go ahead.
Jashandeep Singh Chadha
Hello. Thank you for the opportunity. Sir, before I ask my question, I just need a clarification on the incentive front. In your presentation you have mentioned that around 37 crore of the incentive received this quarter was from the previous period. So is it in line with the expectation and the run rate that the management was, you know, building in or should we treat it as a one off item and you know, how should we look at this 37 crore.
Dharmender Tuteja
When. We said that the run rate for the next year is about 200 crores. So this new incentive is also included. So this incentive is including the retrospective side. That is why the figures have been stated that 37 crores to the previous year and 9 crores for first half. But the impact will come in the coming years also. That is included in the run rate of 200 crores per year.
Jashandeep Singh Chadha
So it is in the normal course of business. Right sir?
Dharmender Tuteja
Yes, please. Yes,
Jashandeep Singh Chadha
Yes. Thank you for the clarification. Now my first question is, you know, largely on account of demand and pricing, you know, in your key states, a few of your key states in both east and Northeast there will be state election that will be happening this year. So with that context, how do you see demand, you know, going in east and what will be the impact on the pricing? How do you see cement pricing? I understand Puneet sir, just mentioned, in short term it is very hard to say. But over FY27, if you can give a wider picture on both demand and pricing, how are you seeing especially in East?
Puneet Dalmia
I think our view is that east is one of the lowest per capita consumption regions in the country and the headroom for growth here is quite high. A lot of the eastern economy is determined by mining and natural resources and I think the government is quite focused on unlocking some of these resources and converting them into GDP growth. Also a lot of infrastructure is being built. So my personal view is that also given the fact that now to get reelected you have to show good development and you have to meet the aspirations of the Indian demographic, which is largely a very young population, my belief is that east should definitely be slightly above than the national average and I think 7 to 8% growth in east should be quite easily possible.
But again, as I said, there will be blips along the way. This is like, you know, large part of Indian consumption is the Capex business, whether it is housing or infrastructure. The repair business is quite low in India still because India is still being built and therefore sometimes Capex gets postponed. Sometimes, but over a slightly longer period it’s more easier to predict quarter on quarter there could be blips. But over a three to five year period it evens out and I think that E should grow in high single digits quite comfortably.
Second point is, if I look at pricing, the pricing in East India and South also declined more than the adjustment for GST post 22nd September. I expect this to come back and. Even. In the first, I mean even in January itself we are seeing some corrections, although they are still, you know, minor and not very meaningful. But I see some upward corrections in January and this is usually a strong quarter in terms of demand also. So I think given the fact that there has been excessive correction in prices and the demand is strong, I expect some price uptick this quarter.
But again, as I said, it’s hard to say. And long term I think prices will get driven by consolidation. I think barriers to entry in this business are rising and higher consolidation will mean higher prices over the medium to long Term. That’s all. Thank you.
Jashandeep Singh Chadha
Thank you for this. But if I put this question. Sorry, sorry sir, you were saying.
Unidentified Participant
Go ahead Jashindeep.
Jashandeep Singh Chadha
Yes. So if I put this question a slightly differently like we had Bihar election and we saw out of all the eastern states Bihar spend close to 55% of their budgeted capex whereas all the other eastern states are less than 25%. So given that West Bengal and Assam will be soon having elections, do you think more funds and more projects will flow to each and hence you will have a higher demand coming from these regions which obviously suits Dalmiya. But just wanted to understand a quick view on you know how elections normally affect demand in that sense.
Unidentified Participant
I think you know if you were to look at, if you look at quarter three we have seen revival across markets on demand in east. So if you were to see four quarters prior and the trend line, I think the trend line has started to move up in quarter three elections would have an impact. We would right now not sit in judgment and anticipate which way it will go. But if you were to look at collective east, I think Bihar is now through the election cycle we expect spending to come back in other markets also I think the spending is a little overdue so we are hopeful it will come back.
So we will see how it pans out. I think Odisha, Jharkhand, Bihar, all of them should go do and West Bengal might see some blip in the interim. But I think that again the demand will come back so high single digit might be. We may end up touching double digit is what our expectation.
Jashandeep Singh Chadha
Understood. Thank you so much for this. Yatin, My last question is largely on cost. We have seen petcoke rise in the recent months. So what will be the impact for Dalnia in fourth quarter on cost front? If you can just give an estimate.
Dharmender Tuteja
The blended cost will go up as we’ve seen that the petro prices have gone up. But of course we’ll try to mitigate this by increasing the blend of the domestic coal which is cheaper.
Jashandeep Singh Chadha
Understood sir. I’ll join back with you for my other questions. Thank you.
Operator
Thank you. The next question is from the line of Indrajit Agarwal from clsa. Please go ahead.
Indrajit Agrawal
Hi. Thank you for the opportunity. A couple of questions. Of the 150-200ps cost savings, how much have we realized so far and what is still pending?
Unidentified Participant
So Indrajit, I think Dharmendraji mentioned in his commentary earlier if you look at slide 23 of our IoT deck, actually we made this explicit because this is generally a question that comes up, you know, I think we gave this week, we gave this estimate around five to six quarters ago. Structurally, if you were to see. I think we have made decent progress. We are, you know, if you were to remove the two major headwinds that have come along, along our way. One was the Tamil Nadu limestone and one is the fuel.
You know, uncertainty. We have roughly in the ballpark of 45 to 50 rupees per ton is what we have structurally extracted. But as Puneetji also mentioned, you know, there are more in the pipeline. So we gave a guidance of 150 to 200. We have down six quarters. We are roughly 50s the bank. I think much more will get converted in the coming quarters. So we are pretty much ready on the journey.
Indrajit Agrawal
Sure, this is helpful. Second, I missed the CAPEX guidance for this year. What was it again?
Dharmender Tuteja
27 crores.
Indrajit Agrawal
And lastly, if you can help us understand how is the current pricing versus 3Q average. We have seen some increases in early January but so is this like meaningfully above 3q average or. We are broadly at the same level.
Unidentified Participant
I think we are just 20 days into the quarter right now. If you were to ask that question. Yes, yes, we are excited with the green shoots but too early for us to count money. Early signs are good. Let us see how it pans out. You know, as we have said, you know, we are not in the business of predicting very immediate short term on prices. So let’s see how it pans out.
Indrajit Agrawal
Sure. Thank you so much. That’s all from my side.
Operator
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Amit Murarka
Yeah, hi, good evening. Thanks for the opportunity. So my first question is on CapEx. So while this year you have essentially been able to control the CAPEX from an initial guidance of 4,000 crores you had given earlier in the year, does it mean that next year now the CAPEX will be far higher with this reduction in 26? And if you could talk a bit more about the journey on capex in 27 and 28.
Dharmender Tuteja
So next year also we expect the CAPEX to be around 4000 crores. And for the next two years I think the CAPEX could be in the range of about 8 to 9,000 crores.
Amit Murarka
So basically 4 and 5 in that.
Unidentified Participant
Yeah, Amit, actually, you know, if you dial back to what Puneeji mentioned, you know, we are working on other projects. There might be some more announcements coming along the way. This is the current project that we are running we would be hitting in the vicinity of 2 1/2 3 on an average. Annual might be on the little above 3. And as we announce more projects, I think we’ll have more clarity. We are a few months away from that announcement so I think we can park that question for a while once we come with the full roadmap of 75 because the next thing is due.
As mentioned, I think we give more clarity. So as of now, if you were to look at the current projection capexes that we are doing ballpark of roughly three per annum and as more happens we’ll announce that.
Amit Murarka
Sure. Understood. Yeah. And just the second question on realization. So again last year in Q1 like we had mentioned that we are pursuing profitable growth, but we have essentially seen realization actually drop almost 9% for you between Q1 to Q3, which is actually higher than the industry pricing decline. So wanted to understand is there been a change in approach or you’re still following the profitable growth strategy?
Unidentified Participant
No. So you’re saying Q1 to Q3?
Amit Murarka
Yeah. So those two quarters essentially both quarters have seen like roughly 4, 4.5% fall, which at least what I understand is a bit higher than the decline seen in the market.
Unidentified Participant
So I’ll make you, I try to answer your question in points number one, discounting and selling is definitely not a strategy on the table. I think when we say profitable growth, we deeply believe in this concept. Point number two, whatever, you know, drop in realization, you’re looking at a blended level is by and large, you know, a mix of the market where we operate. As you are aware, east and south have seen the most significant drops in terms of the prices industry wide. So if you were to benchmark us versus the peers, I don’t think you will see our fall steeper.
If anything, you know, we would have improved something on price positioning. So rest assured that the NSR drop is not, you know, an outlier to the industry. It would be one shade better only and discounting is not on the table as a strategy to sell and the profitable growth remains our objective.
Amit Murarka
Sure. And if I could just squeeze in one last question. So we have seen generally a very strong pickup in demand from December onward, largely. So in that context, what would you kind of pin your volume guidance if you can give any for FY27?
Unidentified Participant
We generally don’t guide the market on volumes, but we remain hopeful that we will be able to do better than the industry. And this is what we are endeavoring to do.
Amit Murarka
Okay. Okay, sure. That’s all for me. Thank you.
Operator
Thank you. The next question is from the line of Naveen Sade from ICICI Securities. Please go ahead.
Puneet Dalmia
Yeah, thank you for the opportunity. So my first question was on the total capacity plan. In your opening comments you said 75 million ton target remains for FY28. And you also said that plans for Jaisalmer will firm up in next few months. Now I’m referring back to your comments in the previous quarters wherein we had alluded that if the JP Associates transaction does not come through, we could actually see the digging, the commencement of like, you know, breaking ground in Jaisalmer by April. So how are we positioned to start Jaisalmer project by April?
Or are we awaiting any incentive related clarity or some. No approvals, may I say, from the government. Before we kick start the Jaisalmer project, how should one look at it?
Unidentified Participant
I think one should look at it with quite a bit of optimism. As Puneeji mentioned, you know, like, you know, we participated in the process. The process was out and open. The CoC has made a decision, as we had said a couple of quarters back, that if this doesn’t happen, we look at other options. We are now actively pursuing JP project detailing. You know, every now the detailing of the project would entail at least 15, 20 critical points before we come and announce a date or a month. So just bear with us.
As we said, in a few months we’ll be back and we’ll be informing you in terms of all the steps. But rest assured that every single element that goes into creating the project is happening and is well on track.
Indrajit Agrawal
Helpful. My second question was on pricing. Puneetji’s initial comment this time appeared a little cautious
Puneet Dalmia
Than what it was in the past couple of quarters. More so after Q1, when South prices had really recovered. I mean we were, I mean, you know, expecting prices to hold up with benefits of consolidation in South. But Q3 of course saw a much sharper dip. So is it fair to assume that competitive intensity has again like, you know, got elevated and that’s why the near term caution,
Jashandeep Singh Chadha
Even though long term optimism prevails.
Puneet Dalmia
Look, the All India capacity utilization of the sector is around 70%, you know, so I think we will see and there is, you know, reasonable capacity expansion in the pipeline. Our belief is that capacity growth will be around 5, 6% per annum. So when demand supply, demand growth, we think maybe 7%, 8% per annum. So really we don’t expect material increase in capacity utilization of the sector over the next few years. Of course there are regional differences. This is the national average I believe that the overcapacity in this sector is here to stay, at least for the next foreseeable future.
So what happens is that when new capacity gets commissioned at that time there are sometimes there is a volatility in prices. But I think new projects are viable and acquisitions are viable at the price at which recent transactions have happened at ebitda, which is much above the current level. So I believe that there is assuming rational behavior in the sector. My personal view is that pricing is going to move up over the medium term and I remain cautious in the short term but reasonably optimistic in the medium to long term.
My position hasn’t changed. But again, as entrepreneurs we are mostly optimistic. So I think you should look at the long term trends in the sector and discount what I want to say if you want to. But I think we are investing, you know, behind the growth in India and our deep conviction that, you know, there is entry barriers are rising due to limestone auctions and due to, you know, not easy to commission new projects and it’s not even easy to integrate acquisitions and you know, you know, turn them around quickly.
So it’s a skill which requires a lot of hard work and lot of focus and a lot of disciplined execution. So in our view that entry barriers are rising and I think consolidation will yield good results in the long term. And I think this GST thing again is a very big shift. It’s almost 10% difference than what it was. Consumers are used to paying a higher price and than what is it than what the spot prices are. And in the medium term at least the prices should easily bounce back to what consumers are used to paying for period of time over a two, three year period.
I think that’s easily possible. So I think I remain optimistic.
Jashandeep Singh Chadha
Great. We truly, truly appreciate your comment. Just one small question
Dharmender Tuteja
For
Puneet Dalmia
The Northeast clinker unit which got commissioned recently, are we planning any split grinding units in Bihar like some of your peers are already contemplating or in an advanced stage of land acquisition? Is that a possibility to expect a better utilization of the clinker there? Yeah. Yeah. My question was about the possibility of a split grinding unit coming up in Bihar. So some of your peers in Northeast are contemplating, rather not just contemplating, are in an advanced stage of land acquisition in Bihar for a grinding unit to utilize the clinker in Northeast.
So. And they are very close competitors to you if I may say in an open forum. So I’m just trying to understand if we also to utilize the clinker better
Indrajit Agrawal
Likely to put up a or pursuing to Put up a grinding unit given the state also has incentives. Just trying to understand your thoughts around better utilization of Northeast clinker. Thanks.
Puneet Dalmia
It’s a definite possibility. I think as I said, we are evaluating all options in line with our, you know, laid out roadmap. And I think as and when we are ready to make announcements, we will. But this is a definite possibility.
Dharmender Tuteja
We
Puneet Dalmia
Have excess clinker in the Northeast right now.
Dharmender Tuteja
Appreciate. Thank you so much.
Operator
Thank you. The next question is from the line of Pinakan from hsbc. Please go ahead.
Ashish Jain
Yeah, thank you very much. My first question is on the near term March quarter. So you mentioned in your comments that you expect industry demand growth of 6%. 1h was low single digits, Q3 was better. But that would broadly imply that Q4 could be as much as 10% industry or late single digit industry demand growth which will be very strong. Would that assessment be correct?
Unidentified Participant
Yeah, this is what we expect. I think the momentum has picked up in December. We expect the same to roll on in quarter four might be a little here and there. So high single digit is what our expectation is for the industry.
Ashish Jain
Sure. If we have such strong demand growth, would pricing also see a similar improvement given pricing has been very weak for the last six months? Or you see industry over capacity, competitive intensity, hold back price increases because naturally such a strong demand growth should drive prices higher.
Puneet Dalmia
Well, as I said, I mean, you know, the prices corrected quite excessively beyond the GST reduction in both south and east and there has been a marginal recovery in January. But as I said, I want to just wait and watch and demand growth obviously helps, but let’s wait and watch as to what happens.
Unidentified Participant
And Kanakan, just to add December saw more decent demand than November, but still it saw a price drop. So we can’t put our finger down and say this is going to happen. Let us see. We are hopeful this should be positive for the industry. We have fingers crossed.
Ashish Jain
Got it. My second question is that, you know the trade share which used to be in the late 60s, Q3, Q4, Q1 has been 62% for the last two quarters or so. So is this the new normal we should work with as newer capacities come on stream for Dalia, or will the trade share go up back to the late 60s?
Unidentified Participant
This is definitely not the new normal. This is a reality in a subdued demand environment. This is something that has happened by choice. I would say partially by and by the way market drove us. I think you should look at mid-60s to high-60s only as a future path. This is what we are, you know, committed to deliver.
Ashish Jain
Got it. Thank you.
Unidentified Participant
In the interim as the capacities come online, there might be a little spike here and there, but steady state, I don’t think this is what you would look at.
Ashish Jain
Understood, Understood. Thank you very much.
Operator
Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi. Thank you. On the expansion plan. Just wanted to touch on the next leg of growth. Puneet, you mentioned 28, 75 million tons given typically takes two years. How confident are you on 75 million ton in 28? And with Jason may just want to check what’s the status on land acquisition ece? We’re hearing reports of some delays in general because of great Indian bustard Gib. So just wanted to see a preparedness specifically in Jaisalmer. And as you look at FY28 and also tied to that would be Navalgarh, that this was awarded four years ago to all the bidders in the premiums were very high.
So given we understand There’s a timeline of three 1, 3 plus 1 years. And if you don’t commence production. Sorry
Operator
To interrupt. Mr. Satyajit sat Jain may be requested to please we hold up for a second ladies and gentlemen, please stay connected while we check the connection for management. Sa. Sam. Ladies and gentlemen, thank you very much for patiently holding. We have Mr. SATA Deb Jain in the connection. Mr. Jain, you may please proceed ahead with the question.
Satyadeep Jain
Hi. Thank you. So just wanted to check on the expansion beyond what you already have specifically tied to north. So you have two options, Jaisalmer and Navalgad. As you look at Jaisalmer specifically, what is the land acquisition status? What is the ece? We are hearing generally some delays in ECE because of great Indian busted even for cement plans. Is that something you’re noticing? So level of preparedness for Jaisalmer especially as you look at FY28 commissioning also Navalgard, it’s been four, five years since you got that and all the others who got that lease in 21 2021.
And typically as we understand that after the award of mining lease, typically there is three plus one years and if nobody commences production within that time frame, the lease is given back. So what is the status on the optionalities you have both in Jason made and double grab this.
Puneet Dalmia
I think on Jaisalmer things are going as per plan. We expect you know a large part of the land acquisition for grinding units etc is already done. And in that area it is not very difficult to acquire Land, some part of it is government land also. So I personally think that we are on schedule in terms of developing that project. So in terms of Navalgar, I think our priority is Jaisalmer right now because from a return perspective we think that this will offer better returns and therefore we are more focused on this at the moment.
Satyadeep Jain
Any anything on GIB related delays are you witnessing in ec?
Puneet Dalmia
Sorry, what. What delays?
Satyadeep Jain
The great Indian Buster related delays there in Jesse.
Puneet Dalmia
I haven’t heard anything about it so far.
Satyadeep Jain
Okay. And secondly on this in the notes to account you mentioned for the ED investigation for Kadappa, the back and forth obviously you gave your reply and then after December there is a reply from ed maybe can you give us some idea what’s happening in terms of what ED reply has been? Is it possible to give some update?
Unidentified Participant
I don’t think it will be fair for us to be very exact with that update. I think we are, we are pursuing it through the right channel and we are optimistic about for a good outcome in near future. But let us wait and we will keep you posted on the developments on that.
Satyadeep Jain
Okay, thank you so much.
Operator
Thank you. The next question is from the line of Shravan Shah from Daurad Capital. Please go ahead.
Shravan Shah
Hi sir, is it possible to share both the Kadappa and Belgium in terms of the capex? So roughly 6,800 crore was the announced Capex. So how much till now we would have broadly would have spent on that?
Unidentified Participant
We would not, we would not want to share project wise Capex details. I think you know you just need to look at the larger picture. As we said, you know the projects are on track. You know we are pretty much on track to deliver them on the target commissioning date and you know detailed project by project Capus is not what you would want to divulge into the cost.
Shravan Shah
Okay, okay. And and previously a participant have, have tried to understand the in terms of the 75 million ton. Still I’m I’m again trying to understand in in further more detail. So if you can specify in terms of timeline because it is becoming a very difficult to to kind of digest that we can reach to 75 million ton. Actually we need a kind of a 13 odd million ton. So we have to start spending now. So that’s what when, when Punisher said that the we will be announcing in couple of months. So I want to understand a couple of months.
Does that mean by March we will be announcing or it could be a by June even if by March also. How how are we kind of Confident that we can reach to a 75 million ton.
Unidentified Participant
So Shivan, a few points point number one. Yes. You know Puneetji mentioned today also we are chasing targeting to be around 75 by FY28. Now Jaisalmer could be an opportunity of in the vicinity of 7 to 8 million tons. We will see how we detail it out. And this could very well take us to in the in the range of 70 because we are looking at 61 and a half any which was the current expansion announced
Puneet Dalmia
Then
Unidentified Participant
You know we just spoke about northeast extract linker that we have and we might end up you know setting up a grinding facility even if we do something in March April announcement. And we also mentioned that you know not that the work is waiting announcement. We are anyhow working on all the levers to set up the project. Even if we do that announcement the next two, three months we will still have you know 24 clear months to have the project up and running. So we are pretty hopeful that you know and you know FY28 is a milestone.
7 around 75 million ton is a milestone give or take a month here and there actually doesn’t matter in this long journey. But just, just wait for a few more months and we will be giving. More clarity on this topic
Shravan Shah
And and. Then given further to if I extend it still we are we are kind of on maintaining 110,130,000,000 ton by FY31. So another 35 odd million ton post this. So does that mean that now onwards we would be kind of every year keep on announcing and then in terms of the capex how our how are we on a yearly run rate basis can look at and in terms of net debt EBITDA what’s the level that we should not be so because everything is kind of a link. So if that’s the plan then in terms of the volume growth also we should be looking kind of a 15% plus kind of a CAGR.
So but that’s not the way we are kind of a portraying. We are still kind of sighing away in terms of clearly confidently talking kind of a that kind of a number 15% kind of a growth because till now also our utilization is low and the way we are we are keep on or are pursuing to add the significant capacities.
Unidentified Participant
So Jayavan, I think we have mixed. Up a lot of points. Number one, let’s talk about. We are not shying away from anything. We delivered a 10% growth quarter the one that we just closed. We are very optimistic about you know beating the industry in terms of growth in the coming quarters and years. So that is point number one. Point number two to your question that should you expect a lot of announcements to come your way? Definitely you should expect a lot of announcement because if we have to cover a journey of doubling our capacity in five years, definitely we have to do that.
To your point of too much capex on the, on the annual. Yes, but you know if you were. To just take a. This is a typical thing that I have been saying to my friends even in the investor community, you know, even in a bad year we generate 3 to 4,000 crores of cash which is equivalent to setting up a 6 to 7 million ton capacity in a year. So if you were to just add up numbers and if you were not to factor any incremental growth or any incremental margin addition, we are still steady in terms of our leverages to fund our growth journey for the next five years.
So I don’t think that is a topic that would worry us too much. And we have stated our capital allocation policy, we have stated our clear goal that we want to stay within 2 in terms of net debt to EBITDA we are 0.6. I think we’ll be comfortably reaching home. So that is not a concern.
Shravan Shah
Yeah. Lastly sir, is it possible that in January we said that some price hike is there? If you can quantify was it kind of a 15 odd rupees and that too in a non trade, was there any price hike in trade also
Unidentified Participant
In January?
Shravan Shah
Yeah, January.
Unidentified Participant
I think it’s still living January. I think you your trade case can give you better indicator than what we know as of now. But let us call the pan out and we’ll have more chat on this topic.
Jashandeep Singh Chadha
Yeah, I’m done. Thank you.
Operator
Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Rahul Gupta
Hi, thank you for taking my question. So I have one question on other opex. So how much of your marketing initiatives that you undertook this quarter had one offs? Now can you please help us understand. That.
Unidentified Participant
We can get back to you in a while. You know we don’t have that number offhand. I’ll try to give it to you before we end the call.
Rahul Gupta
Okay, so just a connected question on the slide 23 where you discuss your cost adjusted for Tamil Nadu tax keeping fuel cost constant from 1q25. So does 3q26 number also include one off from marketing expenses? Yes, yes
Unidentified Participant
It does. Actually we have just, you know we did not want it to slice and dice it too Much So it has one of the marketing. It has a spike of you know the fix the shutdown cost we had in this quarter. We don’t want to cut out down two layers. We just called out the two larger headwinds because that is everything else is. A part of business. The way we see it. If you were to ask me structurally I think we are. We look at a larger number than what is coming in front of you. And hence when we say that more initiatives are in pipeline that is the reason that we say that.
Rahul Gupta
So just want to understand that the cost savings that you have got is 50 rupees or more than that because a part of marketing expense is already included in that. So maybe your savings are better than 50 rupees. Right?
Unidentified Participant
Yeah. That is what we are trying to mention.
Rahul Gupta
Okay, great. Thank you.
Operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to.
Unidentified Participant
Sorry, just to answer that question. Roughly 20 to 23 crores of extra marketing spend has been incurred this quarter. If you were to, you know, take that number.
Operator
Thank you. Participants are requested to please limit your questions to one per participant. The next question is from the line of Pratik Kumar from Jeffries. Please go ahead.
Prateek Kumar
Yeah, good evening. My couple of questions. Firstly, your employee cost on an annualized basis has remained like hardly moved in past two years from 24 to 26. Is this also part of cost saving and how is this kind of happening and the outlook there is the first question.
Unidentified Participant
I don’t think employee cost reduction as such is a line item of a cost saving agenda. Yes, we believe in running a fitter, leaner organization which is, you know, fit for purpose of future. But this is not a stream of cost initiative that we are driving very consciously. Hello.
Prateek Kumar
Sure. So basically but your employee cost in two years have grown only 2% each. So you have seen a reduction in employees during this period or what?
Unidentified Participant
As I said, you know. We are. Getting into a mode where we have a fitted organization for future. I am saying that cost reduction for through employee cost is not a stated. Objective that we are trying to change. It’s a byproduct of all the other. Efficiencies that we are building in the system.
Prateek Kumar
Right, sure. My other question is on JP assets. So as far as public information like it has been like sort of given out by NCLT to the other group, other industrial group. So why are we like sort of sort of still chasing it and still talking about it like bit confused on. The thing
Unidentified Participant
We did not talk about. It.
Operator
May be requested to please Rejoin the queue. We have participants waiting for the tone. Thank you. The next question is from the line of Kunal Shah from Dam Capital. Please go ahead.
Amit Murarka
Yeah, hi sir, just one question now for a large part of the year the government capex momentum was on the softer side and now we are seeing a demand rebound in December and Jan, now could you just provide some color here on the profile whether we are seeing pickup of central capex or state capex or more IHB led rural demand. So just wanted to understand the sustainability of recovery as we speak.
Puneet Dalmia
Actually you know, as I said that it’s very hard for us to build a model like this where we can get a very accurate quarter on quarter, state by state demand projection. There are times when projects get delayed, there are times when there is large capex and projects get accelerated. So I think what we have learned is instead of spending too much time on this issue and becoming a perfect demand forecaster, we are better off making a, you know, larger trend line on how the, you know, Indian overall demand is likely to behave and plan our investments on that basis.
I think we have found that it’s just, you know, a better way to spend time to plan investments which are longer term with a longer term trend line in mind. And I think there are sometimes blips along the way but as I said earlier, things catch up and revert to mean unless there is some very, very structural change. So overall I still believe that 7 to 8% demand growth over the next 10, 20 years is possible in India and that is the core drivers remain intact which is infrastructure, which is housing, which is commercial urbanization and also the revival of manufacturing and private capex in India.
These four drivers structurally I think will remain intact. We don’t see any reason why, I mean we don’t see any reason quarter on quarter to change our view on this and we also don’t see any reason to change our investment strategy unless something fundamentally changes. So I think it’s hard for me. I know I cannot give you an answer to a question which, you know, we just don’t look at it quarter on quarter and frankly we don’t even know. So I think it’s hard for me to give you an answer to this question and frankly maybe you guys are better qualified to answer this based on the data that you see.
But we don’t plan our investment strategy also. So if demand growth becomes negative, our investment strategy won’t change. If demand growth suddenly becomes 13, 14% in one quarter, our investment strategy won’t change. But yes, you know, we are ready in the market. Our distribution, our, you know, sales infrastructure, all that is planned based on, you know, the capacity that, that we put in. So I think I can’t give you a better answer than this that we look at medium to long term for this. Thank you.
Amit Murarka
Understood. This is extremely helpful. Just one small follow up here. Just to put this the other way around. Are we seeing any pick, let’s say in terms of tendering activity or inquiries, especially on the non trade side or the infra projects. I mean if you would just help with that. Thank you.
Puneet Dalmia
Yeah, yeah, certainly. I mean I think we are seeing a lot of, you know, large capexes. There are metros being built almost in you know, nine or ten cities in India where we are participating. Large capex happening there in northeast. A lot of bridges are being built, hydropower projects are in the annual, you know, there are roads, I mean we, you know, we see it all the time. There are railway tracks. So I think there is a lot of activity on infrastructure and you know, yes, there are tenders which are, which are coming in for some of these, you know, large projects on a continuous basis.
Operator
Sorry to interrupt. Mr. Shah, may we request you to please rejoin the queue sir, we have participants waiting. You can actually just.
Puneet Dalmia
I’ll just take 30 seconds more. You can actually see in our investor deck we have put down some projects where Dalma has been supplier to some infrastructure projects. There are pictures and there is location of those projects also. Thank you.
Operator
Thank you. The next question is from the line of Ashish Jain from Macquarie India. Please go ahead.
Unidentified Participant
I had just one question earlier on the call. I’m sorry to interrupt you
Operator
Mr. Jain. Your voice is not audible sir.
Unidentified Participant
Is this better now?
Ashish Jain
Yeah, it’s better. We can hear you.
Unidentified Participant
Earlier on the call, you know, you made a point that capacity addition remains quite decent in the sector and utilization may not improve materially, you know, for the industry on overall basis. Right. So in that backdrop, how should we think about the margin profile of the industry? Is it like remaining in a range and most of the expansion will be driven by cost efficiencies and all or there’s a strong case for a sustained price hike for the industry from let’s say the next 3, 4, 5 year point of view?
And if yes, then what kind of drives that confidence? Because in organic expansion also remains quite steep in the sector irrespective of how much consolidation we see in the space.
Puneet Dalmia
I think our belief is that if you look at the roce of most of the companies, it is not in line with what we see globally in consolidated markets. I also think that when new capacity comes in, there is a quest for market share at times. And all industries go through this phase of sometimes people prioritize market share over margins and sometimes people prioritize margins over market share. So I think all industries go through this cyclicality in terms of what is priority, at what point in time. My belief is that with a 7 to 8% demand growth, I think to keep up the earnings profiles, cost reduction can happen maybe 3, 4%.
But beyond the level, cost has a finite limit to below which you cannot go. And ultimately I think prices should get a strong uptick. If I look at a long term CAGR in this sector of prices in the last 10 years it has been quite dismal. So last 10 year price CAGR is like very low single digit. And I think it begs the question that whether consolidation has actually driven prices up and whether it has given returns or not in terms of prices, I feel that, you know, if I look in the rear view mirror, it doesn’t give too much confidence that consolidation will give a price uptick.
But given the fact that entry barriers are rising and cost of setting up capacity or acquiring new capacity is fairly rich, I personally think to earn risk adjusted hurdle rates of return, I expect prices should go up in the medium to long term. But how soon, how up, how much up is hard for me to predict. But I think it’s a conviction that I have given what we’ve seen in different industries, different geographies within India as well as outside India.
Indrajit Agrawal
But
Puneet Dalmia
Again, it’s a view that we hold the future will only tell whether we are right or wrong. But we are basing our investment strategy based on this assumption. But we are not going to hang all our boots on price increase. We are going to make sure that we work hard on figuring out right markets in which we want market share. We are going to figure out how to remain efficient. We are going to make sure that our capital allocation is disciplined and we remain within the leverage conditions that we have outlined.
So we will grow with a very strong balance sheet and with a very efficient cost structure. So yes, price is a bonus, but it is not something that we are dependent on for meeting the returns that we are targeting internally.
Unidentified Participant
So pureet. So if I can just have a follow up on that. So. My only concern is the cash flows in this sector are so strong that it’s very difficult to believe that the capacity aspiration of companies will not be there tomorrow or day after tomorrow. So are you seeing any change in terms of how managements are operating? Because ROE really is not something companies talk about that often in this sector particularly. Do you sense there’s a change in, especially given the change in ownership of capacities and all in the sector in the last four or five years.
And could that be a trigger you believe, you know, in terms of how people think about profitability?
Puneet Dalmia
No, sorry, I didn’t, I didn’t get your question. You are saying that cash flows are strong so people will keep adding capacity and hence prices will not go up. Is that the question?
Unidentified Participant
Yeah, because that’s what you have seen, right, in the last 10, 15 years. Because, you know, it’s a definite possibility.
Puneet Dalmia
Look. Yeah.
Unidentified Participant
Yeah, sir, go ahead.
Puneet Dalmia
No, it’s a definite possibility. I mean, who knows the future? As I said, if you look in the rear view mirror, the price CAGR is like low single digit, it’s below inflation. So if you, you know, look in the past, that’s the reality, you know. So yes, I mean there is a possibility that people keep adding new capacity and cash flow remains strong and prices don’t go up. Yeah, that’s a definite possibility. I mean, I don’t know. But I remain convinced that, you know, you know, there is a strong case that as, as you know, consolidation happens even more because it is hard to execute.
It’s a boring business. A lot of people in the next generation want to get, are more attracted to, you know, different sectors which offer amazing opportunities in India. And I think this business requires disciplined execution. It’s boring. It requires the hard work on the ground. And I don’t know how many people can institutionalize managing scale at these levels. So over a long period of time, more consolidation will happen driven by multiple factors, portfolio choices, succession, etc. And I think as more consolidation happens, in my view, prices should go up.
Unidentified Participant
I think with that we
Puneet Dalmia
Have to end the call.
Operator
Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. Puneet Dalmia for closing comments.
Puneet Dalmia
Once again, I wish all of you a very happy 2026 and thank you for your interest in our company and thank you for all your incisive questions. We look forward to continuing our interactions in the quarters ahead. Thank you very much. Have a great day.
Operator
Thank you. On behalf of Dalmia Bharat limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.