Dalmia Bharat is planning to increase its cement capacity to more than 48 million tonnes (MT) by the end of fiscal 2024 from the current 35.9 MT by setting new plants and expansion of existing facilities, acquisitions and debottlenecking of production with an investment of Rs 9,000 crore.
“We have an ongoing project of 2.5 MT, greenfield of 3 MT, brownfield of 1.7 MT and upgradation of around 5.3 MT. This will take the capacity to 48.4 MT by March of FY24,” said Puneet Dalmia, managing director of Dalmia Bharat in an interaction with ET.
Dalmia said the company has finalised land in Chennai and Tuticorin in Tamil Nadu to put up two grinding units and is in an advanced stage of finalising land in Bihar for a new project.
“We strongly believe in the growth story of India and the capex cycle has begun,” said Dalmia.
For the December quarter of FY22, the company reported a consolidated net profit of Rs 103 crore, which was 44% lower year-on-year, on the back of slow demand and high-cost pressure.
“This was a tough quarter. I think we had demand compression as well as a spike in energy costs and in such a short period it is difficult to pass on these costs,” Dalmia said. However, Dalmia expects the hit on profitability to be temporary and said demand is strong in India.
“The long-term view on the sector is that demand is strong, and I’m of the firm opinion that there is going to be a huge infrastructure build in the country and big housing growth …We have been a little ahead of the curve and we announced our expansion plans in October,” Dalmia said.
The company is also investing in cost-efficiency technologies. “We are making investments to reduce our cost structure. We are making investments to reduce power and heat consumption and new generation coolers and more,” Dalmia said.
The company is also testing out electric vehicles, including electric trucks in Odisha, for transportation. “If that works well, we will be investing in EVs,” he said. The company aims to maintain its status of being net debt-free for the next few years. The company’s net debt-to-Ebitda is a negative 0.64, he said, adding: “We are a debt-free company, with a very strong balance sheet.”