Dalmia BharatLtd Q2 FY27 Earnings Call — Analysis (NSE: DALBHARAT)
Dalmia Bharat reported subdued Q2FY27 operating performance with EBITDA/t dropping to ₹698/t amid weather disruptions in East, while integrating Jaypee assets and targeting H2 volume rebound.
Result quality: poor — Slipped to loss. Management sentiment: neutral.
The take
Q2FY27 Sales Volume 7.1 MT ( +3% YoY ) . Guidance cut — FY27 Q4 central india assets utilization 35-40% . But missed . New story: Jaypee acquisition and integration .
Results
Cement volumes rose 3% YoY to 7.1 MT with ex-Central EBITDA/t falling to ₹746/t (reported ₹698/t) due to fixed-cost underabsorption and petcoke inflation, alongside ₹339 Cr exceptional items.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Sales Volume | 7.1 MT | +3% | yoy · Q2FY27 |
| Sales Volume (ex-Central) | 7.1 MT | +4% | yoy · Q2FY27 · ex-Central |
| Reported EBITDA per ton | ₹698/t | none · Q2FY27 · includes ₹50/t dilution from Central assets | |
| EBITDA per ton (ex-Central) | ₹746/t | none · Q2FY27 · ex-Central operations | |
| Exceptional Items Charge | ₹339 Cr | none · Q2FY27 · includes ₹57 Cr separation charge, Konark transition, and 97 MW thermal impairment | |
| Organic Capex | ₹909 Cr | none · Q2FY27 · H1FY27 cumulative capex ₹1,420 Cr | |
| Contingent Liabilities | ₹931 Cr | -₹198 Cr | qoq · Q2FY27 · post MMDR amendment reduction |
Guidance
Management guided FY27 capex at ₹3,200–₹3,400 Cr, Central India assets reaching 35–40% utilization and near EBITDA breakeven by Q4FY27, and organic H2 volumes growing in line with industry.
What management committed to
- We are on track to achieve a 35% to 40% utilization of our [Central India (Jaypee) assets] by end of financial year '27. — 35-40%, FY27 Q4
- We expect a further cost impact of around ₹75 per ton in quarter 3 [from fuel costs]. — ~₹75/ton, Q3FY27
- The EBITDA dilution from [Central India assets] will increase to about ₹100 to ₹125 per ton in quarter 3. — ₹100-125 per ton, Q3FY27
- We should be touching ₹1,000 plus [EBITDA per ton] in quarter 3, provided the price trend continues. — >₹1,000/ton, Q3FY27
- Incentive accrual will normalize back to [prior levels of ₹45-50 Cr per quarter] in quarter 3 and quarter 4 onwards. — ₹45-50 Cr per quarter, Q3FY27-Q4FY27
- We will maintain net debt to EBITDA leverage below 2x on a sustainable basis. — below 2x, indefinite
Key themes
Central India integration and cost-price dynamics
How the narrative shifted
- Input cost volatility from West Asia conflict: Cost impact has been larger than anticipated, but management frames it as manageable through operational levers.
- Jaypee acquisition and integration: Teething issues in Q2 acknowledged, but framed as expected; timelines reaffirmed with more granular guidance.
- Premiumization driving realizations: Phasing out Konark is a new development to sharpen premium focus.
- Capacity expansion pipeline to 67 Mt: No change; progress highlighted.
- Capital allocation discipline: Management emphasizes maintaining leverage below 2x and discipline in further expansion until existing projects generate cash.
- Resilient cement demand: Soft patch in East attributed to floods, not structural; demand outlook still positive.
- Leadership transition and organizational strengthening: New announcement: CFO takes additional sales and marketing role; CMO transitions to adviser.
- Regional demand divergence (South/West strong, East/Northeast weak): This divergence explains much of the Q2 underperformance and is expected to reverse in H2.
Operational commentary
- Lit new clinker line at Belgaum and started trial runs ahead of schedule; 3 MTPA cement mill trial runs slated in next few weeks, targeting commercial ops before Q4 peak season.
- Rewa operations restarted mining with clinker line and cement mill ramping under trial runs; commercial capitalization expected in Q3FY27.
- Phasing out legacy brand 'Konark' as part of unified brand strategy and accelerating premium portfolio rollout (e.g., Weather365).
- Renewable energy (RE) share reached 52% in Q2FY27 (capacity scaled to ~450 MW); impaired 97 MW of thermal power capacity across 3 existing plants due to RE transition.
- Leadership transition: Navin Tewari (CMO) transitioning to Strategic Advisor to MD effective January 1, 2027; CFO Yatin Malhotra taking additional charge of Sales & Marketing.
Analyst Q&A
Q. Underperformance versus regional peers on volume growth, realization, and EBITDA per ton during Q2.
Attributed to severe monsoon impact in East/Northeast affecting volumes, leading to fixed cost under-absorption of ₹100–₹120/t and adverse mix impact of ₹50–₹60/t, both expected to reverse in H2.
Q. Details on Jaypee asset restart costs, pricing gap, and specific state-wise underperformance in East.
Declined to give specific Excel-level or state-level micro data; reiterated targeting Q4 breakeven for Central assets and overall sales uplift.
Q. Long-term capacity target timeline post Jaypee/Belgaum/Kadapa.
Company will reach 67 MTPA capacity with current projects (and ~70 MTPA if BJCL materialises); not rushing to announce new capex until Belgaum and Central assets stabilize and deleverage the balance sheet.
Q. Rationale for merging Sales & Marketing into CFO Yatin Malhotra's role.
Planned transition where Navin Tewari built distribution blueprints; Malhotra will oversee both temporarily to align operational execution and financial strategy before a separate CFO is appointed.
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