India: Dalmia Barat sees 20% volume growth in September

Dalmia Bharat managed 20 per cent volume growth in the July-September quarter compared with the industry's volume growth of two per cent. Due to higher demand, its market share in northeastern India improved to 22 per cent in the Jul-Sep quarter from 16 per cent in the previous year. In the south its market share improved by 100 basis points to eight per cent.

Factors such as gain in the market share, entry into new markets and exports helped higher volume growth at the company, says Economic Times. The company has also benefited from its 75 per cent stake in OCL India, which sells slag cement. As a result, the company's operating profit before depreciation (EBITDA) was INR1140 (US$0.98)/t in the September quarter, much higher than the INR700-800 reported for the industry, claims Economic Times.

In the next three years, the company is expected to benefit from cement demand arising out of higher construction activities over the past few quarters in the southern region and also from state elections in Karnataka, Chhattisgarh, Orissa, Andra Pradesh and Bihar. This is likely to improve its capacity utilisation in FY19 from 57 per cent at the end of September 2016.

Tamil Nadu-based Dalmia Bharat has enhanced its capacity to 25Mta recently. Since the company has no expansion plans for the next three years, its debt-equity ratio is expected to come down to 1.5 in FY18 from 2.3 in FY16 as it will be able to utilise incremental profit from the expansion to repay debt.