# 1. Financial Performance ## A. Key Figures * **Quarterly Revenue:** **₹811 Cr** (+26% YoY) · **H1 FY25 Revenue:** **₹1,723 Cr** (+24% YoY) * **Quarterly EBITDA:** **₹194 Cr** (+100% YoY) · **H1 FY25 EBITDA:** **₹424 Cr** (+97% YoY) * **Quarterly PAT:** **₹71 Cr** (+1083% YoY) · **H1 FY25 PAT:** **₹159 Cr** (+327% YoY) ## B. Revenue Growth * **Regional Price Divergence:** Northeast prices stabilized after an **Rs. 8 increase** in Q2, while Bihar and West Bengal saw Q2 declines of **Rs. 5** and **Rs. 7**, respectively. * **Operational Impact:** Q2 per-ton EBITDA was **lower by ₹100** due to planned shutdown costs, with recovery expected in Q3. ## C. Profitability Trends * **Exceptional Bottom-Line Growth:** PAT surged on strong operating leverage and cost control, despite **annual shutdown costs of ₹13–14 Cr** recurring in Q2. * **YoY Margin Expansion:** EBITDA margin improved significantly, with a **₹14–15 Cr** favorable swing expected in Q3 as shutdown costs lapse. ## D. Margin Performance * **Policy-Driven Margin Support:** Bihar’s state policy to provide **₹400–500/tonne margin benefit** will enhance returns at the Begusarai unit, offsetting logistics costs. --- # 2. Volume & Demand Trends ## A. Key Figures * Cement Sales: 7.64 lakh tons Northeast (+2%) · 3.09 lakh tons Outside Northeast (+45%) * Volume Guidance: 5.4–5.5 million tons FY26E (16% growth YTD) * **FY27 Volume Growth Outlook:** **12%** despite regional constraints ## B. Regional Sales Mix * **Northeast Drives Growth:** Cement sales in the Northeast posted strong double-digit volume gains, underpinned by robust 8%-9% regional demand growth and high import dependency due to attractive margins. * **Emerging Infrastructure Pipeline:** Significant incremental demand expected from Arunachal Pradesh’s dam and hydro projects, though execution has not yet commenced. * **Sales Penetration Beyond Region:** Cement shipments outside the Northeast surged on a low base, reflecting expanded market reach despite structural challenges. ## C. Trade vs Non-Trade * **Trade-Dominated Portfolio:** Trade sales remain the core channel at **80%** of volumes, with non-trade at **20%** and premium products representing a negligible **1%** share. ## D. Volume Guidance * **Confident Full-Year Outlook:** FY26 volume guidance unchanged with strong momentum in Q1 and resilient October demand, particularly in the Northeast, offsetting election-related concerns for Q4. * **Sustained Growth Trajectory:** Double-digit volume growth expected next year despite temporary clinker shortages impacting the Siliguri plant and no new geographic expansions. --- # 3. Capacity & Expansion ## A. Key Figures * Clinker Capacity: 6 Mn ton current · +4 Mn ton planned in Rajasthan/Haryana region * **Bihar Plant CAPEX:** **₹500 Cr** (2 Cr ton grinding unit) * Nimbol CAPEX: ₹2,400–2,500 Cr (3 Mn ton clinker + 4 Mn ton grinding) * **AAC Block Utilization:** **~60%** off-season (18,900 CBN vs 16,000 nameplate) ## B. Project Pipeline * **Bihar First:** Groundbreaking priority given to **Bihar grinding unit** (2 Cr ton) to capture East/Central markets and improve clinker utilization, despite **Jorhat land being acquired**; project deferred due to Silchar focus. * **Rajasthan Dual-Track Strategy:** **Nimbol** prioritized over Jaisalmer for central North reach; **Jaisalmer** retained as future hub with strategic mine presence secured. * **Northeast Long Game:** **Umrangso clinker plant** (18 Cr ton reserves) remains on track with land and mining rights secured; environmental clearances underway—**critical enabler for Jorhat grinding unit**. * **Strategic CAPEX Discipline:** Expansion fully self-funded; **Bihar CAPEX revised up to ₹500 Cr** from initial ₹300 Cr, reflecting cost realism. ## C. Commissioning Timeline * **Silchar Imminent:** Commissioning expected **within 3 months** (by Jan CY), adding 2 Cr ton capacity and de-risking Northeast supply. * **Bihar Operational in 2–3 Years:** Plant initiation expected in **3–5 months**, with commissioning targeted **H1 FY28**, contingent on demand and approvals. * **Rajasthan & Umrangso by 2030:** Both projects expected online by **FY29–FY30**, with Rajasthan benefiting from faster **2–3 year construction cycle**; Umrangso timing demand-driven. * **Logistics Optimization:** Long-haul clinker transport from Lumshnong to Begusarai (1,050 km) to use **70 km road + rail rake**, with plant sited near **rail siding** for efficiency. ## D. Capacity Utilization * **AAC Block Off-Season Strength:** Achieved **~60% utilization** in early operations (18,900 CBN vs 16,000 capacity), signaling strong initial demand and execution capability. --- # 4. Product & Segment Mix ## A. Key Figures * **Cement Blend Mix:** **16% OPC** · **84% PPC** * **AAC Block Revenue:** **₹13–14 Cr** Q2 FY26 · **₹50–60 Cr** expected full-year FY26 * **New Product Revenue (AAC + Chemicals + RMC):** **₹80–90 Cr** expected FY26 * **AAC Margin Guidance:** **12%–15%** expected EBITDA margin ## B. New Product Launches * **Strategic Expansion:** Entry into **construction chemicals** marks a diversification push, with initial revenue contribution expected in next quarter’s reporting. * **Integrated Growth Push:** Combined new product line (AAC, chemicals, RMC) targeted for **₹80–90 Cr** in FY26, driven by branding and distribution reach rather than near-term profitability. ## C. AAC Block Performance * **Scaling Production:** AAC revenue scaled from **minimal Q2 contribution** to full-year guidance of **₹50–60 Cr**, reflecting successful ramp-up to full production capacity. * **Margin Profile:** AAC business expected to deliver **12%–15% margins**, a positive mix contributor, though exposed to **fly ash and cement input volatility**. * **Distribution Synergy:** Leverages existing cement logistics network, enabling dual-product delivery to **non-trade customers and dealers**, enhancing channel efficiency. --- # 5. Cost & Input Factors ## A. Key Figures * Fuel Cost: ₹1.25/kcal (down from ₹1.35) · ₹1.25–1.3/GCV (industry-low) * **Fuel Mix:** **80% FSA** · **20% biomass & other coal (incl. Nagaland)** * **Coal Stockpile:** **5–6 months** (~283,000 tonnes) ## B. Fuel Cost Advantage * **Significant Cost Decline:** Fuel costs fell sharply QoQ to an industry-low level, supported by favorable stockpile quality and current allocations. * **Stable Outlook:** Costs expected to remain broadly stable in Q3 due to low burn rate and secured supply mix. * **Strategic Stockpile Benefit:** Prior-year delayed SSA supplies created a high-quality, low-cost inventory advantage now being realized. ## C. Coal Stockpile Level * **Extended Runway:** Robust stockpile covers 5–6 months of consumption, insulating operations from near-term coal price volatility. * **Cost Protection:** Stockpile sufficient to prevent any increase in coal expenses for at least the next 5 months. ## D. Limestone Access * **Cost Reduction Initiative:** Active efforts to secure non-option mines in Nimbol to lower limestone input costs ahead of plant development. * **Northeast Expansion:** Ambuja secured limestone mine auctions in the Northeast 5–6 months ago, though land allocation from district council remains pending. --- # 6. Risks & Competition ## A. Key Figures * **Financial Impact of GST Change:** **₹130–150/ton** reduction in reimbursement benefit ## B. Pricing Pressure * **Competitive Intensity in Key Markets:** Management acknowledges intense competition in Bihar from **JK Cement** and smaller players, with price declines, but views the market as strategically vital due to its status as East India’s fastest-growing region. * **Market Share Defense Strategy:** Plans to leverage the **Siliguri plant** to strengthen positioning ahead of Bihar unit launch, aiming to maintain share while protecting pricing and curbing external inflows. * **Clinker Ramp-Up Neutral Outlook:** Dalmia does not expect volume or pricing disruption from its own clinker plant ramp-up, citing stable regional demand dynamics. * **Unit Economics Protection:** Relies on **logistical optimization** and **state incentives**, including a **300% SGST benefit**, to offset structural cost pressures. ## C. Market Entry Risks * **Ambuja Entry: Uncertainty with Constructive Outlook:** While the impact of Ambuja’s potential entry remains uncertain, management expects industry participants to prioritize long-term profitability over aggressive share grabs. ## D. Regulatory Impact * **Bihar Incentive-Driven Investment:** The **300% SGST benefit** under Bihar’s industrial policy is a key driver for plant development, enhancing project economics despite recent headwinds. * **GST Rate Cut Impact:** Recent reduction in GST rates has diminished the effective reimbursement benefit, creating a per-ton financial headwind now being managed through operational levers. * **Northeast Market Leadership:** Dalmia holds the **leading market position in the Northeast**, facing limited competition from 3–4 regional unlisted players, supporting pricing control. * **Long-Term Competitive Balance:** Management expects the market structure to remain balanced, underpinning confidence in sustained margin resilience despite new entrants. --- # 7. Guidance & Outlook ## A. Key Figures * EBITDA/PAT per Ton: ₹1,650 QoQ (+vs. ₹995.10 YoY) · ₹1,715 H1 (+vs. ₹1,000 YoY) * **CAPEX (H1 FY26-27):** **₹211 Cr** incurred * **CAPEX (FY26 Full Year):** **₹710–720 Cr** projected (₹500–510 Cr in H2) * **Incentive Income:** **₹56 Cr** in Q · **₹118–120 Cr** in 1H · **₹180–190 Cr** estimated for FY26 ## B. EBITDA per Ton * **Exceptional Margin Expansion:** EBITDA/PAT per ton surged to ₹1,650 in Q and ₹1,715 in H1, reflecting **strong double-digit improvement** driven by operational leverage and cost optimization. * **Outlook Above Guidance:** Current performance exceeds the guided range of ₹1,500–1,550 per ton, suggesting **upside potential to full-year profitability**. ## C. CAPEX Plan * **Strategic Deployment:** Full-year CAPEX of ~₹720 Cr focused on commissioning the **Silchar plant**, building a **42 MW solar facility in Assam**, and securing land in **Umrangso (Bihar)** and **Jorhat**. * **Next-Gen Expansion:** FY27 outlay hinges on finalizing the roadmap, with **Bihar grinding unit** as the primary investment focus; **Rajasthan project** remains contingent on approvals. * **Transparency Commitment:** Management to release a **detailed CAPEX and expansion plan within 1–1.5 months**, enhancing visibility into medium-term capital allocation. ## D. Incentive Projections * **Stable Incentive Pool:** Despite a slower realization pace—extending from 5 to **6–7 years**—the total benefit remains intact within the existing 15-year framework. * **Material Contribution:** Incentive income remains a key earnings driver, with **₹180–190 Cr expected in FY26**, supported by ₹118–120 Cr already recognized in 1H.