Dalmia Bharat exuberant after Q1 show

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, perked up on higher volumes and cost optimization. Volumes showed a 22% (YoY) jump at 3.76 MT, which is the highest in the sector. Consolidated net sales rose 10% at Rs.1765 crore and total costs as a percentage of total revenue earned was down from 83% to 79%. Power and fuel costs were down 17% at Rs.202 crore. EBITDA came in at Rs.509 crore, up 28% while margins improved from 25% to 29%. 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.94 crore, up 76%.

The market is naturally very happy with this performance and the stock, which yesterday had hit a new 52-week high at Rs.1532, today briefly went to Rs.1531 and is now at Rs.1518 levels, up 2.5%.