Dalmia Bharat Expects Q1 Volumes To Drop Sequentially On Fresh Covid Lockdowns
A shovel sits in a tub of freshly mixed cement at a residential construction site. (Photographer Angel Navarrete/Bloomberg)

Dalmia Bharat Expects Q1 Volumes To Drop Sequentially On Fresh Covid Lockdowns

Dalmia Bharat Ltd. expects cement volumes to drop sequentially in the quarter ending June on account of lockdowns in select states amid a renewed surge in coronavirus cases.

Volumes, however, will be higher year-on-year in the first quarter, according to Mahendra Singhi, managing director at Dalmia Bharat. The industry has witnessed a 3-5% contraction in volumes in April and May compared with growth estimates of 15-20% during the same period, he told BloombergQuint's Niraj Shah in an interview.

But despite the uncertainty facing the industry that may last for a few more months given the localised lockdowns, Singhi said the fixed cost of Dalmia Bharat remains the lowest among the top five-six cement makers in India.

The cement maker reported 24% year-on-year rise in volumes at 6.42 million tonnes—the highest in a quarter—in the three months ended March. That came mainly on the back of a pick-up in demand, the government’s push toward infrastructure and low-cost housing projects. Dalmia Bharat’s revenue in the fourth quarter, too, increased 32% over the year earlier to Rs 3,280 crore. The company, however, postponed the announcement of its capital allocation policy due to the pandemic.

For the financial year ending March 2022, Singhi expects the company to beat the 10-12% estimated volume growth for the industry, majorly driven by capacity expansion and higher utilisation.

Watch the full interview here:

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