Dalmia Bharat Limited: history, ownership, mission, how it works & makes money

A Brief History of Dalmia Bharat Limited

Dalmia Bharat Limited, a prominent player in the cement industry in India, traces its roots back to 1939. Originally named Dalmia Cement (Bharat) Limited, the company was founded by Bharat Dalmia and focused on cement manufacturing. The company set its first plant in Tamil Nadu, boasting a production capacity of 200,000 tons per year.

In the post-independence era, the company expanded its operations, becoming a part of the Dalmia Group. With a vision to contribute to India’s growth, Dalmia Bharat continued to enhance its production capabilities, resulting in modernization and expansion of facilities throughout the 1960s and 1970s. By the late 1970s, Dalmia Bharat had established itself as a leading cement producer with a capacity exceeding 1 million tons annually.

The 1990s marked a significant turning point for the company as it underwent a restructuring phase. By 2005, Dalmia Bharat had successfully merged with the Dalmia Cement (Bharat) Limited and started focusing on expanding its footprint in new markets. The company went public in 2008, raising approximately ₹1,200 crore through its Initial Public Offering (IPO).

In the 2010s, Dalmia Bharat shifted its focus towards sustainability by adopting a green business model. The company invested heavily in renewable energy, with a goal to increase its power generation from renewable sources to 60% by 2030. In 2021, Dalmia Bharat reported revenues of ₹9,881 crore with a net profit of ₹1,437 crore, showcasing a robust growth trajectory amidst challenging market conditions.

As of 2023, Dalmia Bharat operates multiple production facilities across the country, totaling an installed capacity of around 25 million tons per annum. The company’s commitment to sustainable practices has made it one of the most eco-friendly cement manufacturers in India, earning recognition for its efforts to reduce carbon emissions significantly.

Furthermore, Dalmia Bharat's stock performance on the National Stock Exchange (NSE) has shown considerable growth, with prices climbing from about ₹600 in January 2021 to approximately ₹1,800 by October 2023. This reflects an increase of over 200% in just over two years, indicating strong investor confidence in the company’s strategic direction and operational efficiency.

The expansion into new markets continues to be a priority, as seen in its acquisition of Murli Industries in 2022, which enhanced its production capability and market reach. Through strategic mergers and a focus on operational excellence, Dalmia Bharat aims to be a dominant player in the Indian cement sector while adhering to principles of sustainability and innovation.

A Who Owns Dalmia Bharat Limited

Dalmia Bharat Limited, a leading cement company in India, has a diverse ownership structure. The ownership includes institutional investors, individual shareholders, and prominent family groups. As of the latest available data, here is a breakdown of major shareholders:

The Dalmia Group, the founding family, significantly dominates the ownership with a stake of 61.2%. This shareholding has been consistent, indicating strong control over the company’s strategic direction. Institutional investors, including LIC and HDFC Mutual Fund, have also established substantial positions, reflecting confidence in the company’s growth trajectory.

In terms of market capitalization, as of October 2023, Dalmia Bharat Limited is valued at approximately ₹20,000 crores. This valuation is underpinned by the company’s extensive operational footprint in the cement industry, producing over 25 million tons of cement annually.

In recent years, Dalmia Bharat has focused on increasing its share of the green cement market, which currently accounts for approximately 5% of its total production. The company's commitment to sustainability has attracted interest from environmentally conscious investors, further diversifying its shareholder base.

This ownership structure, characterized by a strong promoter holding alongside significant institutional backing, positions Dalmia Bharat Limited for continued growth within the competitive cement industry in India. The ongoing investments in technology and capacity expansion are expected to enhance shareholder value over the coming years.

Dalmia Bharat Limited Mission Statement

Dalmia Bharat Limited aims to be a leader in the cement and sugar industry by delivering quality products while maintaining a commitment to sustainability and community development. The company's mission statement reflects its dedication to innovation, efficiency, and enhancing stakeholder value.

According to the company’s mission, the focus is on producing high-quality cement with an annual production capacity of around 25 million tonnes. They emphasize sustainable development with initiatives aimed at reducing carbon emissions, targeting a 33% reduction in carbon intensity by 2030.

Dalmia Bharat's mission aligns with its goal to contribute to the nation-building process through economically viable solutions and responsible practices. As of the FY 2022-23, Dalmia Bharat recorded an EBITDA of ₹1,940 crores and a net profit margin of approximately 13%.

In terms of corporate governance, Dalmia Bharat Limited is committed to transparency and accountability, striving for adherence to the highest ethical standards. Their mission extends to enhancing employee welfare by investing in skill development programs, which currently cover over 70% of their workforce.

Financial Overview

Dalmia Bharat Limited's mission encompasses a commitment to operational excellence, as demonstrated by their strategic expansions. The company has announced investments of approximately ₹1,300 crores over the next three years to enhance production capacity and efficiency. This investment plan reflects the company's aim to achieve a capacity of 35 million tonnes by 2025.

Furthermore, in alignment with their sustainability goals, Dalmia Bharat Limited has integrated renewable energy into operations, with 50% of their energy consumption now sourced from renewable sources, a figure projected to reach 75% by 2030.

Community Engagement

Dalmia Bharat Limited’s mission also highlights its commitment to the communities they operate in. In FY 2022-23, the company invested around ₹45 crores in corporate social responsibility initiatives aimed at education, healthcare, and rural development. They are involved in over 250 community development projects across various states in India.

With a workforce exceeding 6,000 employees, Dalmia Bharat promotes inclusivity and gender diversity, aiming for a 20% representation of women in leadership roles by 2025.

This multifaceted approach to its mission not only underscores Dalmia Bharat Limited's business goals but also reinforces its social responsibility framework, creating a lasting impact on both the environment and society.

How Dalmia Bharat Limited Works

Dalmia Bharat Limited operates primarily in the cement industry and is one of the leading cement manufacturers in India. As of the latest reports, the company has a production capacity of approximately 25 million tons per annum. Its operations span across various states in India, including Tamil Nadu, Andhra Pradesh, and Odisha.

The company’s core business involves manufacturing and selling both ordinary Portland cement (OPC) and blended cement, which accounts for a significant portion of its revenue. In the financial year 2022-2023, Dalmia Bharat achieved a total revenue of around ₹13,293 crores, reflecting a growth of approximately 12% year-over-year.

Dalmia Bharat focuses on sustainable practices and has invested heavily in renewable energy. As of 2023, the company sources about 34% of its energy needs from renewable sources, with a target to increase this to 50% by 2030. The installed capacity for renewable energy stands at 154 MW.

The cement production process at Dalmia Bharat involves the following stages:

• Extraction of raw materials including limestone and clay.
• Crushing and milling of raw materials to produce raw meal.
• Kiln operations to produce clinker.
• Grinding of clinker with gypsum to produce cement.

The company employs advanced technologies and automation in its manufacturing processes, which enhances efficiency and reduces operational costs. For instance, the use of Vertical Roller Mills (VRM) has significantly improved the energy consumption rates, bringing them down to 60-65 kWh per ton of cement produced.

Dalmia Bharat also maintains a robust distribution network. The company operates approximately 1,200+ exclusive dealerships and has a presence in over 22 states across India. With a logistics fleet that includes around 1,500 trucks, the company ensures timely delivery to customers.

Financially, Dalmia Bharat has been performing well, with the following metrics from the recent fiscal year:

In terms of market presence, Dalmia Bharat has a strong brand reputation. The company's stock is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) under the ticker symbol DALMIACEM. As of October 2023, the share price has been trading in a range of ₹1,800 to ₹2,200.

Investment in digital transformation is another cornerstone of Dalmia Bharat's strategy. The company employs data analytics for demand forecasting and optimizing production schedules. This data-driven approach has improved operational efficiency and customer satisfaction rates.

Dalmia Bharat also engages in corporate social responsibility initiatives, focusing on sustainable development, education, and health. The company has invested over ₹100 crores in various CSR projects over the last year, impacting numerous communities across its operational regions.

Overall, Dalmia Bharat Limited operates through a comprehensive approach combining production efficiency, sustainability, strong distribution, and social responsibility, which positions it well in the competitive landscape of the Indian cement industry.

How Dalmia Bharat Limited Makes Money

Dalmia Bharat Limited, established in 1939, operates primarily in the cement and sugar manufacturing sectors. The company generates revenue through its diverse product offerings, with its cement business being the primary revenue driver. As of FY 2023, Dalmia Bharat reported a consolidated revenue of ₹12,745 crore, showcasing robust growth in the industry.

In the cement segment, Dalmia Bharat has a production capacity of approximately 25 million tonnes per annum (MTPA). The company operates a number of plants across India, including in Tamil Nadu, Andhra Pradesh, and Uttar Pradesh. The cement prices in India saw an average increase of about 5-7% year-on-year, contributing significantly to the company’s revenue growth in the last fiscal year.

As of Q2 FY 2024, the average realization per tonne of cement stood at approximately ₹5,200. The rising infrastructure projects and government initiatives, particularly the National Infrastructure Pipeline, have positively impacted demand, further fueling the company’s growth.

Dalmia Bharat also has a strong presence in the sugar business. The company produced around 9.6 lakh tonnes of sugar in the 2022-2023 sugar season, with a revenue contribution of ₹2,500 crore. The sugar prices have remained volatile, but average selling prices were around ₹34,000 per tonne during the last season.

Additionally, the company has a thriving refractories business, which contributes to around 5-6% of its total revenue. This segment benefits from the increasing demand from steel and cement industries, reinforcing the company’s diversified income sources.

Cost control measures have also played a crucial role in enhancing profitability. The company’s operating margin for FY 2023 was approximately 20%, owing to efficient operational practices and optimized supply chain management. The EBITDA for the same period was reported at ₹2,950 crore, reflecting a year-on-year increase of about 15%.

In addition to its core businesses, Dalmia Bharat is actively pursuing sustainable practices. Investments in green energy and alternative fuels aim to lower production costs and align with global sustainability trends. The company's goal is to reach a carbon-neutral footprint by 2040, which may also provide additional financial incentives in the form of government grants and subsidies.

Overall, Dalmia Bharat Limited capitalizes on a well-rounded business model that includes cement, sugar, and refractories, ensuring steady revenue streams and strong market positioning. The focus on expansion, sustainability, and cost management continues to drive its financial performance forward.