Why did Dalmia Bharat report such tepid growth in net profits for Q4?

For the fourth quarter ended March 2022, cement major Dalmia Bharat reported 7.27% higher sales revenues yoy at Rs3,380 crore. FY22 revenues for the full fiscal were higher by 11.63% at Rs11,286 crore. Volumes were strong but price realizations were tepid. Even as volumes picked up 15.7% to 6.6 MT in Q4FY22, lower price realizations were seen. Installed capacity in Q4FY22 was up 17% at 35.9 MT with the commercialization of the 2.9 MT capacity plant located at Murli in the state of Maharashtra.

Net profits for Q4FY22 were lower by -5.10% at Rs595 crore and this can be largely attributed to the sharp spike in power and fuel costs, which has been the problem for most cement companies. EBITDA margin was 21.5%, while EBITDA per tonne stood at Rs1,091. Net margins stood at 17.60% in Q4FY22 quarter compared to 19.90% in Q4FY21. The reduction of net debt to below cash levels, improved the solvency ratios of Dalmia Bharat.