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Dalmia Bharat experiences a 5% drop after reporting a 60% fall in Q2 profits

Stocks
2 min Read Oct 21, 2024
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Shares of Dalmia Bharat, a prominent cement manufacturer, faced a decline of up to 4.66% during Monday’s intraday trading on the Bombay Stock Exchange (BSE). The drop in stock price to ₹1,764.05 per share came after the company reported underwhelming growth in its quarterly earnings for the second quarter of the 2024-25 financial year (Q2FY25). Investors looking to invest in stocks may need to reconsider their positions in light of these results.

Sluggish profit growth raises concerns

The company disclosed a staggering 60.5% year-on-year (Y-o-Y) decline in net profit, amounting to ₹49 crore for the quarter ending September 30, 2024. This is a sharp decline from the ₹124 crore net profit achieved during the corresponding period last fiscal year. Furthermore, Dalmia Bharat's revenue from operations fell by 2.1% Y-o-Y, totalling ₹3,087 crore compared to ₹3,153 crore in the previous year’s corresponding quarter.

At the operating level, earnings before interest, tax, depreciation, and amortisation (Ebitda) plummeted by 26.8% to ₹434 crore, down from ₹593 crore during the same period last year. The Ebitda margin for the quarter also suffered, standing at 14.1%, compared to 18.8% in the previous fiscal year.

Interim dividend declared

Despite the challenging financial performance, Dalmia Bharat's board has declared an interim dividend of ₹4 (200%) per equity share on 18,75,47,629 equity shares of ₹2 each for the 2024-25 financial year. The record date for determining shareholder entitlement for this interim dividend is set for Saturday, October 26, 2024.

Positive growth in cement volume

On a positive note, the company reported an 8.4% Y-o-Y increase in cement volume for the second quarter, reaching 6.7 million tonnes (MnT). Ebitda per tonne was recorded at ₹650. Additionally, Dalmia Bharat is advancing its renewable energy initiatives, with renewable energy consumption rising to 39% during the quarter.

The future outlook remains optimistic

Puneet Dalmia, managing director and CEO of Dalmia Bharat, expressed optimism about the cement sector's future. He stated, "I believe that as India grows, the cement sector, being a proxy, will continue to flourish." He also highlighted the company's expansion plans, saying, "We are actively working to announce our Phase II expansions within the next nine months and achieve our interim milestone of 75 million tonnes by FY28."

At 10:22 AM, Dalmia Bharat’s stock price slipped by 4.72% to ₹1,763 per share on the BSE, while the BSE’s Sensex remained flat at 81,214.85.

Key takeaways

  1. Dalmia Bharat's Q2FY25 net profit fell 60.5% to ₹49 crore.

  2. Revenue from operations declined by 2.1% Y-o-Y, totalling ₹3,087 crore.

  3. An interim dividend of ₹4 was declared, with the record date on October 26, 2024.

  4. Cement volume increased by 8.4% Y-o-Y, reaching 6.7 MnT.

  5. The company remains focused on renewable energy and future expansions.

For investors considering investing in stocks, monitoring Dalmia Bharat’s performance amid these developments could be crucial.