Dalmia Bharat Q3 profit slumps 75% amid weak prices, slow demand

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Dalmia Bharat's net profit fell 75 percent to Rs 66 crore in Q3FY25 as weak cement prices hit realisations of India's  fourth-largest cement producer. Its net profit was at Rs 266 crore in the same quarter last year.

On a sequential basis, net profit rose 34.7 per cent.  The company reported a consolidated revenue from operations of Rs 3,181 crore for the quarter ending December 31, down 11.7 percent on-year, mainly due to sluggish price growth and weak demand envionment.

Volume for the reporting period declined 2 percent YoY to 6.7 million tonnes (mnt) and flat on a sequential basis.  Dalmia Bharat's EBITDA  also fell about 35 percent YoY to Rs 511 crore.

"Cement demand growth in Q3 fell short of our earlier expectations. Our volumes de-grew by 2 percent YoY while EBITDA fell 34.5 percent YoY to Rs 511 crore with persistent softness in cement prices. With demand now gaining traction and prices showing signs of optimism, we are confident about a stronger performance in the upcoming quarters," said chief financial officer Dharmender Tuteja, in a separate press statement.

During the quarter, the cement manufacturer completed debottlenecking at Rajgangpur, Odisha (0.6 MnT) and Kadapa, Andhra Pradesh (0.3 MnT). Its  total Clinker capacity increased to 23.5 MnT.

“After multiple years of high growth, India witnessed a slightly slow start to the year, but government's continuous focus on investment-led growth coupled with the strong structural growth drivers underpin my confidence in a rebound of the Indian economy. In this backdrop, I believe cement demand growth will regain momentum. Our capacity expansion plans are on track as we will reach 49.5 MnT by the end of this year," said managing director and chief executive officer  Puneet Dalmia.

During Q3FY25, the company  signed Group Captive renewable power agreements totaling 21 MW (megawatts) of RE Capacity, bringing their  total RE power arrangements under group captive to 299 MW, including the previously secured 278 MW. It targets operational RE capacity (including group captive) to reach 267 MW by end of FY25. Pivot to green energy has reduced its power and fuel expenses 8 per cent to Rs 666 in the quarter.

Shift to renewable power is shrinking the power costs for most cement companies and continued strategy to source green power remain crucial to  be profitable especially in the face of rising competition and subdued prices.