Dalmia Bharat – On Path To Be A National Player: ICICI Securities


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Dalmia Cement Bharat Ltd., a wholly-owned subsidiary of Dalmia Bharat Ltd., has entered into a binding ‘framework agreement’ for the acquisition of clinker, cement and power plants from Jaiprakash Associates and its associate.

As per the agreement, Dalmia Bharat shall acquire 9.4 million tonnes per annum cement assets (25% of existing capacity) and 6.7 mtpa clinker assets besides 280 mega watt thermal power plant at an enterprise value of Rs 56.7 billion implying a capital cost of ~$73/tonne (FY18 Ultratech Cement Ltd.-Jaiprakash Associates deal was at ~$93/tonne).

On completion of the deal, Dalmia Bharat’s grinding/clinker capacity shall increase to ~46/28 mtpa respectively and strengthen its presence in Central India markets.

It aims to be a pan-India cement company with capacity of 75 mtpa by FY27 and 110‐130 mtpa by FY31.

We await the completion of the deal before factoring-in the acquired capacity; however, we increase our realisation growth assumption for FY23E/FY24E given the healthy price hikes in East and South India (~90% of Dalmia Bharat’s capacity exposure is to these regions) during the current quarter (Q3 FY23).

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