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Motilal Oswal Report
Dalmia Bharat Ltd.'s results surprised, driven by strong realisation and cost reduction. Ebitda/tonne came in at Rs 1,678 (up15% YoY) – the highest ever for the company.
Volumes declined 20% YoY to 3.66 million tonne (our estimate 3.64 million tonne) due to plant shutdowns in April; however, this was much better than the industry (down approximately 38% YoY), led by strong independent house building demand in the eastern region.
Realisation rose 12% QoQ to Rs 5,393 per tonne (down 3% YoY), driven by price hikes in the southern and eastern regions, 2% higher than our estimate of Rs 5,303 per tonne. As a result, revenue fell by 22% YoY to Rs 19.7 billion (our estimate 19.3 billion).
Variable cost was down, led by reduced power consumption, reduced power rate, and increased blended cement sales. Reduced marketing activity, traveling expenses, office administration expenses, and other overheads have led to a further reduction in cost, but as volume picks up, these costs are expected to normalise.
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