Dalmia Bharat expansion roadmap to 75 MTPA by FY28

Pan-India ambition meets a fresh capex cycle

Dalmia Bharat is pushing ahead with a multi-year expansion plan aimed at widening its footprint across regions and positioning itself as a pan-India pure-play cement company. Management has linked this strategy to strong economic fundamentals, government-led capital expenditure, and ongoing consolidation in the cement sector. The company has repeatedly reiterated its target to reach 75 million tonnes per annum (MTPA) of cement capacity by FY28. Beyond that, it is also evaluating additional projects that could take capacity to 110-130 MTPA by FY31.

The current phase is anchored on a set of projects across the Northeast, South, and West. Alongside volume growth, the company has emphasised cost leadership as a parallel priority, with multiple initiatives spanning energy, logistics, and input optimisation.

Assam clinker and grinding additions in focus

Dalmia Bharat has highlighted the Northeast as a key market, citing demand growth and profitability potential. In recent updates, the company said it commissioned a new 3.6 million tonne clinker line at Umrangso in Assam to strengthen supply to the region. Separately, another operational update noted that the clinker unit at “Tumarangshu” was nearing completion and was expected to be commissioned in Q2FY26. The overall message across these updates is consistent: Assam is a central piece of the company’s capacity and regional expansion strategy.

In Q4FY25, Dalmia Bharat commissioned Phase 1 of its 49.5 MTPA expansion milestone. This included a 2.4 MTPA grinding unit in Lanka, Assam, and a 0.5 million tonne grinding unit in Bihar. The company also stated that commissioning of the Lanka unit establishes it as the largest cement producer in the Northeast region.

Belgaum, Pune, and Kadapa: schedule and commissioning targets

Management has said that the Belgaum-Pune expansion and the Kadapa expansion are progressing as per schedule. According to an expansion update, civil work is ongoing at Belgaum, while equipment ordering has been placed at Kadapa.

The company is targeting commissioning of the Belgaum and Pune plants by the end of FY27 and the Kadappa integrated plant by Q2FY28. These projects, as guided, are expected to raise cement capacity to 61.5 million tonnes by FY28E. Dalmia Bharat has also indicated it would look to add cement capacity in the eastern region to better utilise the clinker plant commissioned in the Northeast.

Capacity milestones: what is confirmed so far

Dalmia Bharat has outlined several capacity markers across its updates. It has said it is on course to achieve 49.5 million tonnes by the close of FY25. It has also communicated that the Belgaum, Pune, and Kadapa projects will take capacity to 61.5 million tonnes, and that it remains on the path to reach around 75 million tonnes by FY28.

In addition, the company has stated it is evaluating further projects to reach 110-130 million tonnes by FY31. Management has also flagged that more detail on its capacity creation plan until FY28 would be provided in Q1FY26, including how it impacts the balance sheet.

Cost reduction agenda: INR 150-200 per tonne target

Cost control remains a major management focus, with a stated goal of INR 150-200 per tonne reduction over roughly two years. The company has said it has already delivered structural cost reductions of INR 45-50 per tonne and expects to realise further savings in upcoming quarters.

The initiatives mentioned include consuming more renewable energy, improving heat and power consumption rates, and optimising logistics. Dalmia Bharat has also pointed to lower raw material costs due to reduced fly ash and limestone costs. On logistics, it is increasing direct dispatches to more than 60% in FY26 versus around 52% year-on-year, aimed at reducing secondary lead distance and handling costs, improving fleet utilisation, and optimising warehousing.

Renewable energy and fuel levers

Energy is a key pillar in the cost programme. One management update indicated the renewable energy share is expected to hit 45% by the end of the year and reach 50% the following year. Another update noted that green power consumption is being ramped up to around 55-60% in FY27E, from 36% and 46% in FY25 and FY26E.

Additional cost levers highlighted include operationalising captive coal mines in Madhya Pradesh, with expected cost savings contribution from FY28 onwards. The company also noted that a coal cess reduction should lead to around INR 20 per tonne savings from Q3FY26 onwards.

Capex and leverage guardrails

On capital allocation, Dalmia Bharat has provided multiple reference points. Management said that in calendar year 2025 it announced fresh capital investments of about INR 6,800 crore for adding 12 MnTPA of cement capacity across the South and West regions. Separately, the company has set a CapEx guidance of INR 3,500 crore for FY26, with the majority allocated to expansions in Belgaum and Pune, the clinker line at “Tumarangshu”, and some land for future projects.

In another update, the company guided a capex outgo of INR 1,000 crore in Q4FY26, leading to a total capex outgo of INR 2,700 crore in FY26E, while stating it expects to meet this guidance. Alongside capex, management reiterated its leverage policy to keep net debt-to-EBITDA below 2x while funding expansion.

Profitability snapshot: margin improvement noted

On performance, Managing Director and CEO Puneet Dalmia said a recovery in cement realisations in key markets helped deliver robust EBITDA growth, resulting in an EBITDA margin of 24.3%. He added this margin was an increase of 5.8 percentage points compared to last year. The company has also stated it expects profitability to gradually improve as commodity inflation cools, citing correction in crude and coal prices from peak levels and the resulting normalisation in operational costs.

Key metrics and project timeline

Market impact and what investors track next

For investors, the near-term focus is on execution: project commissioning milestones, capex discipline, and the pace of cost-out delivery. Dalmia Bharat has emphasised that it is focused on creating capacity rather than pushing utilisation, to balance profitability with volume growth. Its stated intent is to develop capacity in markets where it can maintain a cost-competitive position and better cost structure.

Broker commentary referenced in the updates also notes that while organic expansion remains on track, some longer-dated expansion targets may be harder to achieve. Against that backdrop, management’s commitment to a net debt-to-EBITDA ceiling of under 2x becomes a key signal of how aggressively the company will pursue the FY31 aspirations.

Conclusion

Dalmia Bharat’s current roadmap combines capacity creation across Assam, Belgaum, Pune, and Kadapa with a quantified cost reduction programme of INR 150-200 per tonne, of which INR 45-50 per tonne has been achieved. The company has reaffirmed the FY28 target of 75 MTPA and continues to evaluate a longer-term path toward 110-130 MTPA by FY31. Management has said more detailed capacity creation plans through FY28, and the balance sheet impact, will be shared in Q1FY26, keeping the next update cycle central to investor expectations.