Dalmia Bharat Ltd expects input costs for the cement industry to soften in the coming quarters as tensions in West Asia ease, although the impact of recent disruptions is likely to weigh on the company’s earnings through the first half of the fiscal year.
“Cost escalations are coming down,” the company’s chief financial officer, Dharmendra Tuteja, said in response to shareholder queries during the company’s 13th annual general meeting on Tuesday.
Tuteja said the ongoing US-Iran peace talks and the easing of tensions in West Asia were “positive developments”. However, the impact of the war will continue to be felt through April-September, before moderating, the CFO said.
“Q1 and Q2 will be affected,” he said, adding that the company is hoping price hikes will help offset higher costs and protect margins.
The country’s fourth-largest cement maker by capacity had flagged war-related cost pressures during its Q4FY26 earnings, saying costs could rise by ₹125-150 per tonne in the April-June quarter over the preceding quarter because of higher fuel, power, logistics and packaging expenses. Its FY26 annual report also warned that geopolitical uncertainties could affect input costs, supply chains and overall market stability.
Brokerage firm Equirus Securities in a note released on 30 June said that Dalmia Bharat could expect volume recovery in FY27 with increasing capacity.
“Q1FY27 could see around 7% volume growth YoY indicating a better than expected quarter,” said Raghav Maheshwari, analyst, cement sector, Equirus Securities.
He said fuel costs, which include pet coke prices, have declined to $133-134 per tonne range in the June quarter from the earlier peak of $155-160 per tonne, indicating some softening. Supply chain restoration should happen in or after the September quarter.
“The impact of West Asia war-related costs would come through mostly in the June month during Q1, and also Q2, before moderating in the latter half, as descalation in the West Asian region continues,” he said.
In FY26, the company’s net profit jumped more than 65% to ₹1,158 crore on the back of better realizations and a moderate rise in costs. Its profit was impacted by a ₹337 crore deferred tax charge. Its net profit was ₹699 crore in FY25.
Revenue from operations increased about 6% to ₹14,804 crore in FY26, while volume growth remained muted, rising 2% to 30 million tonnes (MT).
Expansion plans
Outlining Dalmia Bharat’s capex plans over the next two years, managing director Gautam Dalmia said the company remains confident about India’s long-term growth despite geopolitical uncertainties.
The company is investing more than ₹10,000 crore to expand capacity to 66.7 mtpa by FY28 from 49.5 mtpa currently.
“We have also announced strategic investments of over ₹6,800 crore to add another 12 million tonnes per annum cement capacity at Belgaum, Pune and Kadapa to serve the white spaces in our stronghold south markets, as well as penetrate deeper into the western markets,” Dalmia said as the company looks to transform itself into a pan-India player beyond its traditional southern, eastern and northeastern markets.
Combined with the ₹2,850-crore acquisition of the cement business of Jaiprakash Associates Ltd (JAL) and another ₹550 crore earmarked for refurbishment and efficiency upgrades, the company’s committed capital outlay exceeds ₹10,000 crore.
The JAL acquisition adds 5.2 mtpa of capacity through plants at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh, strengthening the company’s presence in central India.
The company plans to spend ₹300 crore over the next year on refurbishing the acquired assets and another ₹250 crore over the next two years to improve operational efficiency.
The expansion programme is being funded through a combination of internal accruals and debt.
Dalmia said the Belgaum (Karnataka) project is at an advanced stage of completion, while the Pune (Maharashtra) and Kadapa (Andhra Pradesh) projects are progressing largely on schedule.
Its installed capacity is expected to rise to 60.7 mtpa by the end of FY27 following the integration of the JAL assets and commissioning of the Belgaum and Pune projects. Capacity will increase to 66.7 mtpa in FY28 after the Kadapa plant is commissioned.
“Over FY27 and FY28, as per announced plans, the company will expand its capacity by nearly 35%, from 49.5 million tonnes per annum to 66.7 million tonnes per annum, positioning Dalmia Bharat as a truly pan-India player,” he said.
India’s installed cement capacity currently stands at about 720 mtpa, according to BigMint. UltraTech Cement remains the market leader with 200 mtpa of installed capacity, followed by Adani Cement (including Ambuja, ACC and other brands) with 109 mtpa. Shree Cement ranks third with 65.8 mtpa, while Dalmia Bharat is the fourth-largest player.