1. At a Glance
Dalmia Bharat drops a power-packed Q1 FY26: ₹883 Cr EBITDA (+32% YoY), ₹395 Cr PAT, and a wild ₹6,800 Cr capex plan for 12 MTPA capacity. But with a P/E of 47 and ROE under 5%, is this cement titan building empires—or just castles in the air?
2. Introduction with Hook
Picture this: You’re pouring crores into kilns, your margins are finally rising, and then boom—investors start asking “Where’s the ROE, bro?” Welcome to Dalmia Bharat Ltd, India’s 4th-largest cement manufacturer with massive ambition and mid-tier returns. With ₹43,000 Cr market cap, this is a classic “capex today, returns tomorrow” story. But is tomorrow getting pushed a little too far?
- Q1 FY26 PAT: ₹395 Cr (+71% YoY)
- EBITDA: ₹883 Cr (+32% YoY)
- Capex Announced: ₹6,800 Cr for 12 MTPA
3. Business Model (WTF Do They Even Do?)
Dalmia Bharat is in the business of cement… and ambition.
Segments:
- Cement Manufacturing (bulk of revenue)
- Power & Waste Heat Recovery (integrated plants)
- Clinker & Grinding operations
Geography:
- Strong in South & East India
- Expanding towards North & Central via acquisitions + greenfield
Product Mix:
- Premium cement variants gaining share
- Trade/retail sales contribute >60% (higher margins)
4. Financials Overview
| Metric | FY23 | FY24 | FY25 | Q1 FY26 |
|---|---|---|---|---|
| Revenue | ₹13,552 Cr | ₹14,691 Cr | ₹13,980 Cr | ₹3,636 Cr |
| EBITDA | ₹2,328 Cr | ₹2,639 Cr | ₹2,407 Cr | ₹883 Cr |
| Net Profit | ₹1,079 Cr | ₹853 Cr | ₹699 Cr | ₹395 Cr |
| OPM | 17% | 18% | 17% | 24% |
| EPS | ₹55.21 | ₹44.04 | ₹36.41 | ₹20.95 |
YoY Growth (Q1 FY26):
- Revenue: Flat
- PAT: +71%
- OPM: 24% = best in 2 years
5. Valuation
- P/E: 47.1x
- P/B: 2.5x
- Book Value: ₹926
- ROE: 4.15%
- Fair Value Range (EduVal): ₹1,800 – ₹2,100
Dalmia trades rich for a cement stock. Its valuation assumes future capacity translates to future profits. But ROE must break past 10% to justify this.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 EBITDA up 32%: Cost control + price hikes
- ₹6,800 Cr capex: 12 MTPA expansion → total 54 MTPA
- Promoter rejig: Birla Tyres moved from “Promoter” to “Public”
- Declining FII stake: From 14.1% to 8.2% over 12 months
- New geographies: Eyeing north India aggressively
- Industry tailwinds: Infra & housing demand solid
7. Balance Sheet
| Item | FY25 |
|---|---|
| Equity Capital | ₹38 Cr |
| Reserves | ₹17,336 Cr |
| Borrowings | ₹5,702 Cr |
| Other Liabilities | ₹7,095 Cr |
| Fixed Assets | ₹17,306 Cr |
| CWIP | ₹2,616 Cr |
| Investments | ₹5,119 Cr |
| Total Assets | ₹30,171 Cr |
Insights:
- Balance sheet strong
- Borrowings inching up due to capex
- CWIP of ₹2,616 Cr = capacity coming online soon
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY25 | ₹2,117 Cr | ₹-2,270 Cr | ₹-39 Cr | ₹-192 Cr |
Takeaway:
- CFO remains strong
- CFI (Capex) absorbing everything
- FCF tight but not scary
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 5.58% |
| ROE | 4.15% |
| OPM | 17% |
| Interest Coverage | 2.9x |
| Dividend Payout | 25% |
| Cash Conversion Cycle | -1 days (lean WC) |
Conclusion:
- Capital-efficient working capital
- Return ratios weak
- Long gestation for recent investments
10. P&L Breakdown – Show Me the Money
| Year | Sales | PAT | EPS | OPM | Dividend |
|---|---|---|---|---|---|
| FY23 | ₹13,552 Cr | ₹1,079 Cr | ₹55.21 | 17% | 16% payout |
| FY24 | ₹14,691 Cr | ₹853 Cr | ₹44.04 | 18% | 21% payout |
| FY25 | ₹13,980 Cr | ₹699 Cr | ₹36.41 | 17% | 25% payout |
Margins stable, but profit has been falling despite rising capex.
11. Peer Comparison
| Company | CMP | P/E | ROE | OPM | Sales | PAT | EV/EBITDA |
|---|---|---|---|---|---|---|---|
| UltraTech | ₹12,452 | 53x | 9.34% | 17.9% | ₹77,752 Cr | ₹6,911 Cr | ~20x |
| Shree Cement | ₹32,345 | 104x | 5.29% | 20.4% | ₹19,282 Cr | ₹1,118 Cr | ~30x |
| Dalmia Bharat | ₹2,320 | 47x | 4.15% | 18.7% | ₹13,995 Cr | ₹922 Cr | ~17x |
| ACC | ₹1,959 | 15.9x | 13.2% | 14.1% | ₹21,762 Cr | ₹2,307 Cr | ~12x |
Verdict:
- Dalmia sits between Ultratech and ACC on valuation
- Lags in returns
- Relies on scale economics to kick in from FY27 onward
12. Miscellaneous – Shareholding, Promoters
- Promoters: 55.84% – stable
- FIIs: Down from 14.1% to 8.23%
- DIIs: Up from 9.4% to 17.4%
- Public: Declined from 23.5% to 18.4%
- Shareholders: 76,773 (down from peak of 94,000)
Interpretation:
DIIs are bullish, FIIs cautious
Retail interest is cooling post-2022
13. EduInvesting Verdict™
Dalmia Bharat is a slow-burning compounder trying to scale from regional champion to national leader. Its 24% EBITDA margin in Q1 is a major green flag—but P/E 47x with ROE under 5% means a lot of optimism is already priced in.
If you’re investing for FY28 cash flows, this could be your bet. But for near-term thrill-seekers? The cement has barely dried.
Metadata
– Written by EduInvesting Team | 23 July 2025
– Tags: Dalmia Bharat, Cement Stocks, Capex Heavy, India Infrastructure, EBITDA Expansion
