- Volumes jumped 10% YoY, outpacing the sector’s 6‑7% growth.
- Operating margin widened by 110 bps to 17.2% despite a 4% price dip.
- Capex plan of ₹4,000 cr aims to lift capacity to 75 MT by FY28.
- Renewable energy capacity now at 410 MW, targeting 576 MW by mid‑2026.
- EV/EBITDA trades at 17.5x – a premium that could tighten on a price correction.
Most investors missed the fine print in Dalmia Bharat’s Q3 report – and that was a mistake.
Why Dalmia Bharat’s Volume Upswing Beats the Cement Curve
The company delivered 7.3 million tonnes in Q3 FY26, a solid 10% YoY increase. The broader Indian cement market is growing at 6‑7%, meaning Dalmia reclaimed market share lost during the GST‑linked slowdown. Trade‑channel sales fell modestly to 62% from 66%, but the premium product mix held steady at ~23%, indicating resilience in higher‑margin segments.
How Cost Discipline Powered a 110‑bp Margin Expansion
Even with a 4% QoQ dip in blended realisations, margins rose to 17.2% because freight costs fell 6% YoY and power/fuel expenses remained flat. Raw material costs rose only 2% YoY despite a new mineral tax in Tamil Nadu, highlighting the firm’s effective procurement strategy. EBITDA per tonne climbed to ₹824, an 8% YoY uplift, underscoring the scalability of the cost base.
Geographic Diversification: The Blueprint to 75 MT by FY28
Dalmia’s expansion roadmap targets a pan‑India footprint. Key projects include a 3.6 MT clinker line and 3 MT grinding unit at Belgaum, plus a new 3 MT grinding unit in Pune to lock in western Maharashtra demand. A 6 MT greenfield plant in Jaisalmer is awaiting environmental clearance, while commercial production from the Umrangso clinker line (3.6 MT) began in Jan‑26. These assets will collectively push capacity to 75 MT, positioning the firm ahead of the sector’s 6‑8% growth outlook.
Renewables and Energy Cost Management: A Strategic Hedge
The addition of 143 MW renewable capacity in the first nine months of FY26 brings total operational RE to 410 MW. The target of 576 MW by mid‑2026 will lock in lower power costs, a crucial buffer against rising fuel prices. Pet‑coke, the industry’s primary fuel, has already jumped 15‑20% YoY, threatening margin compression for peers lacking such green buffers.
Pricing Trends: From Southern Slump to Early‑2026 Recovery
January 2026 saw price improvements of 2‑3% MoM across all major territories, reversing the steep price fall in the south caused by labor shortages and construction slowdown, and the eastern weakness linked to Bihar elections. However, competitive intensity remains fierce, and any resurgence in pet‑coke costs could reignite margin pressure.
Sector Context: Infrastructure Spending Fuels a 6‑8% Growth Trajectory
Government road and rail projects, coupled with urban development schemes, underpin a stable demand environment. Private sector activity is also picking up, especially in affordable housing, which traditionally drives bulk cement consumption. Historically, when the Indian cement sector has posted 6‑8% growth, top performers have enjoyed multiple‑digit earnings expansions, as seen during the 2015‑16 infrastructure push.
Investor Playbook: Bull vs. Bear Cases
Bull Case: Continued volume outperformance, margin upside from renewable energy, and a capacity expansion that outpaces sector growth could push EV/EBITDA back toward 15x, delivering 20‑25% total returns over the next 12‑18 months.
Bear Case: A sharper-than-expected pet‑coke price rally, delayed environmental clearance for the Jaisalmer plant, or a sustained price decline could compress margins, forcing the valuation premium to erode.
Given the current 17.5x FY26 EV/EBITDA multiple, a modest pull‑back in share price presents an attractive entry point for investors seeking exposure to India’s infrastructure‑driven cement narrative.