Dalmia Bharat reported a 13.8 percent EBITDA margin for Q2 FY27, down 6.9 percentage points due to higher fuel costs and one-time charges of Rs 339 crore. While sales volume rose 3 percent to 7.1 million tonnes, net debt increased to Rs 5,722 crore as the company funds its capacity expansion. Investors will monitor if planned price hikes and new asset commissioning can stabilize profitability in the coming quarters.
Dalmia Bharat faced a difficult second quarter for the fiscal year 2027 as rising costs and one-time expenses weighed on profitability. The company’s operating profit margin dropped to 13.8 percent, a sharp decline of 6.9 percentage points compared to the previous year. This was primarily caused by a 20 percent jump in power and fuel costs, which reached Rs 1,224 per tonne. Additionally, logistics, raw material, and general operating expenses also increased, as the company continued to scale its operations.
The company’s bottom line was also hurt by non-recurring financial burdens. Dalmia Bharat recorded a loss of Rs 282 crore related to the closure of three power plants and a discontinued brand, along with Rs 57 crore in one-time employee separation costs. While sales volume saw a modest 3 percent growth to reach 7.1 million tonnes, these extra costs significantly impacted overall earnings for the quarter.
Despite these short-term pressures, the company is moving ahead with its capital expansion plan. Net debt increased to Rs 5,722 crore from Rs 4,431 crore in the previous period, as the company invested in assets within the central region. Management is working toward a long-term goal of reaching an installed cement capacity of 70 to 75 million tonnes per annum by fiscal year 2028.
The new central region assets are currently impacting margins by about Rs 50 per tonne. This pressure is expected to rise to between Rs 100 and Rs 125 per tonne in the third quarter as the Rewa plant moves toward full commercial production. However, management expects these specific assets to reach break-even status by the end of this fiscal year.
To counter the rise in global pet coke prices, which have climbed above $180 per tonne, the company has implemented price hikes of Rs 15 per bag across its southern and eastern markets. With the broader Indian cement sector expected to grow by 7 to 8 percent this fiscal year, supported by ongoing government infrastructure spending, the next key monitorable will be whether these price increases and the successful ramp-up of new capacity can help the company stabilize its profit margins in the second half of the year.