Dalmia Bharat (DALBHARAT) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw muted cement demand due to elections, heat waves, and water shortages, with sector demand growing 2%-4% year-over-year and sales volume rising 6.2% to 7.4 MnT.

• EBITDA increased 9.2% year-over-year to Rs 669 crore, driven by lower power and fuel costs and cost reversals.

• Net Debt/EBITDA improved to 0.17x, reflecting a strong balance sheet.

• Commercial production commenced at Ariyalur (TN) and Kadapa (AP), each adding 1 MnT capacity, with total installed cement capacity at 45.6 MTPA as of June 30, 2024.

• A one-time provision of Rs 84 crore (pre-tax Rs 113 crore) was made due to Jaiprakash Associates Ltd. insolvency.

Financial highlights

• Q1 revenue was Rs 3,621 crore, flat year-over-year as volume growth offset a similar decline in net sales realization.

• EBITDA margin improved to 18.5% from 16.9% year-over-year, with EBITDA per ton at Rs 901.

• Power and fuel costs dropped 22% year-over-year to Rs 1,003 per ton, with renewable energy share rising to 35%.

• Logistics cost per ton decreased 3.4% year-over-year to Rs 1,117.

• Net profit for Q1 FY25 was Rs 145 crore, stable year-over-year.

Outlook and guidance

• Prices are expected to remain soft through the monsoon quarter, with potential recovery from Q3 FY25.

• FY25 industry volume growth is expected at 8%, with the company targeting 12% growth (including tolling volumes).

• Cost reduction of Rs 150-200 per ton targeted over three years, driven by higher renewable energy, captive coal mines, and logistics optimization.

• Renewable energy share to reach 50% by Q4 FY25, with 127 MW of new agreements signed.

• Commitment to RE100 by 2030 and carbon negative by 2040 remains on track.