Dalmia Bharat in its FY23 annual report highlighted long-term expansion plans – grinding capacity of 75mtpa/110-130mtpa by FY27/FY31; sustainability initiatives to improve profitability and initiatives toward logistics optimization; and maintaining leverage at a comfortable level – net debt-to-EBITDA below 2x.
It commissioned clinker/cement capacity of 2.8mtpa/2.7mtpa through debottlenecking at various plants in FY23. In Apr'23-end, the company commissioned grinding capacity of 2.5mtpa at Bokaro, Jharkhand (line-II), taking its total grinding capacity to 41.1mtpa.
In FY23, it signed a definitive agreement with Jaiprakash Associates (JPA) to acquire JPA's cement assets located in central India. Further, recently the company announced its plan to set up clinker/cement capacity of 3.6mtpa/ 2.4mtpa at its northeast plant at a total capex of INR36.4b.
The company has set an aggressive target of increasing its grinding capacity to 75mtpa/110-130mtpa by FY27/FY31 through organic and inorganic routes. Currently, it has a major presence in east and south India. It intends to establish its presence in the west, central and north India by FY24-end. In a recent article, the management indicated that the company is doing its largest capex ever.
Dalmia Bharat’s consolidated revenue grew 20% YoY to INR135.4b, aided by an increase in sales volume/realization by ~16%/4% YoY. However, consolidated EBITDA declined 5% YoY to INR23.2b and OPM dropped 4.4pp YoY to 17% due to significant cost pressures. EBITDA/t declined 17.5% YoY to INR901.
The company has taken several initiatives to reduce operating costs. The key cost-saving measures include: 1) increase in green power share to 29% vs. 17% in FY22, 2) increase in TSR to 17% vs. 13% in FY22, 3) reduction in clinker factor and increase in blended cement in product mix, and 4) savings in logistics costs through a digital bidding platform for transporters and the use of heavy-duty electric trucks for transportation of raw materials. It also secured two coal blocks, namely Brinda Sesai (East) and Mandala North (Central), which will provide fuel security and cost optimization for kilns.