The shares of the fourth largest cement manufacturer gained up to 2 percent after the company announced a strategic investment of approximately Rs 3,520 crore in the states of Maharashtra and Karnataka.
Price movement
With a market capitalization of Rs 31,899.21 crore, the shares of Dalmia Bharat Ltd were trading at Rs 1,700.70 per share, increasing around 1.05 percent as compared to the previous closing price of Rs 1,687.75 apiece.
Reason for Rise
The shares of Dalmia Bharat Ltd have seen positive movement after announcing a strategic investment of approximately Rs 3,520 Crore in the states of Maharashtra and Karnataka, tol establish a 3.6 MnTPA clinker unit and a 3 MnTPA grinding unit at its existing Belgaum plant, Karnataka, coupled with a new greenfield split grinding unit with a capacity of 3 MnTPA in Pune, Maharashtra.
With this expansion, Dalmia Bharat’s total installed cement capacity will increase to 55.5 MnTPA, after considering the ongoing expansion of 2.9 MnT at Assam and Bihar. These new units are expected to be commissioned by Q4 FY27. Moreover, the capex will be funded through debt and internal accruals.
Furthermore, the Belgaum Grinding Unit will strengthen market presence in Southern Maharashtra, while the Pune Grinding Unit targets untapped Western Maharashtra. This aligns with the company’s goal of becoming a PAN India player, reaching 75 MnTPA by FY28 and 110-130 MnT capacity by 2031.
Cement Demand Insights
Cement demand growth remained modest in Q3 FY25 due to lower government spending, state elections, and unseasonal rains. However, government capex rose 21 percent Y-o-Y in November, with higher expenditure expected from December to March. Q4 demand is projected to grow 6-7 percent Y-o-Y, leading to 3-4 percent annual growth.
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Operational Performance
The company’s volumes declined 2 percent YoY to 6.7 million tons in Q3 due to the previous year’s JP plant tolling impact, while sales from Dalmia plants grew 3.7 percent YoY. Cement prices improved in December, but competitive intensity may restrict substantial gains.
Renewable Energy Initiatives
The company commissioned 4 MW of solar power, increasing its total renewable energy capacity to 252 MW. It aims to achieve a 40 to 45 percent renewable energy share in overall consumption by FY25, reinforcing its commitment to sustainability and expanding its clean energy footprint.
Expansion Plans
The company is set to reach 49.5 MnT cement capacity by FY25, with a Phase 2 expansion to 75 MnT by FY28 expected soon. A Rs 3,000 crore capex for FY25 will drive capacity growth and cost reduction, reinforcing its vision for nationwide expansion and market leadership.
Future Outlook
The management is optimistic about structural growth in the cement industry, expecting a higher return on capital than the past decade. A demand rebound is anticipated, driven by increased investments in infrastructure, housing, and manufacturing, supporting long-term expansion and strengthening the industry’s overall growth outlook.
Company Profile
Dalmia Bharat Limited is an Indian cement-producing firm. The Company primarily manufactures and sells cement and associated materials. The Company’s segments are Cement and Others.
Written by Abhishek Singh
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