Dalmia Bharat

Dalmia Bharat is a cement making company and has a total consolidated capacity of 24 MTPA, the fourth largest cement company in India. Its USP is its market – from being recognized as a Southern company, it has made deep entrenchments into East and North East of India. It made its presence in these regions through acquisitions on OCL India in Odisha, Calcom Cements in Assam and Adhunik Cement in Meghalaya. At the same time, it is expanding its capacity in Karnataka, ensuring its presence in South. Currently 79% of its revenue comes from South and by end FY17, hopes to bring it down to 60%.

The company posted an excellent set of numbers for Q1FY17 and we could see the same trend in Q2FY17 too and once again, this was on the back of, perked up on higher volumes and cost optimization. Volumes showed a 20% (YoY) jump at 3.42 MT, which is the highest in the sector. Consolidated total income rose 19% at Rs.1938 crore and total costs as a percentage of total revenue earned was down marginally from 89% to 86% (YoY) but up from Q1 of 83%. Power and fuel costs were down 17% in Q1 but this Q2, it is up 3% - costs are slowly surely creeping up. Its logistics cost, using a mix of rail and road, was down 11%. The cement EBITDA for the quarter was at Rs.1233/tonne v/s Rs.1351/tonne (QoQ) and Rs.1165 (YoY).

Overall EBITDA rose 28% at Rs.421 core and margins improved from 20% to 21.7% (YoY). Interest and depreciation costs have risen, mainly on account of two plants – one in Assam and another in Karnataka. The company ended the quarter with a net profit of Rs.31 crore, up 150% (YoY) but down from Rs.94 crore posted in Q1FY17. Equity is at Rs.18 crore and annualized EPS is at Rs.28 (FV of Rs.2).