Dalmia Bharat is set to invest around INR10bn (US$120m) in capital expenditure in the quarter ending March 2024, bringing its total spend for the current fiscal year to INR30bn (US$360m), according to senior management. The investment covers expansion projects in Bihar and the North-East, land acquisition for future projects, and cost reduction initiatives, said the company's CFO, Dharmendra Tuteja.
The company, India's fourth-largest cement producer, has outlined a capital expenditure plan of INR25bn-30bn (US$300m-360m) for the 2025-26 fiscal year. Dalmia Bharat currently has a production capacity of 46.6Mta, which is expected to increase to 49.5Mta by March 2024. Chief executive officer, Puneet Dalmia, noted that within six months, the company will unveil a roadmap for its second expansion phase, targeting a capacity of 75Mta.
India, the world's second-largest cement producer, continues to witness aggressive capacity additions driven by both organic expansion and acquisitions to meet anticipated demand from the government's infrastructure push. A Crisil report from last year projects an additional 150-160Mta of capacity to be added between 2024-28. However, the firm cautions that rising competition could cap significant price growth.
Commenting on market conditions, Mr Dalmia stated that despite recent price recoveries, intense competition may limit substantial gains. "I think this is the time when everybody is aggressive and going for market share. And I think there is added suffering because of the lack of demand growth in the first nine months," he said. He further highlighted that the industry may soon shift focus from market share expansion to prioritising margins. "Beyond a level, market share will not deliver value," he added.
Dalmia Bharat anticipates ongoing competitive pressure, particularly in the southern Indian markets, alongside continued industry consolidation.
