CRISIL Ratings said that the ratings continue to reflect the strong business risk profile of the DBL group, backed by its established and diversified market position across southern, eastern, northeastern and western regions and cost-efficient operations. .

The ratings further factor in the strong financial risk profile of the group, evident from moderate leverage and strong liquidity.

These strengths are partially offset by the relatively lower return on capital employed (RoCE) and susceptibility to risks related to volatility in input costs and realisations, as well as inherent cyclicality in the cement industry.

The group is estimated to incur various capital expenditure (capex) over the medium term to augment its capacity to 75 million tonne per annum (MTPA) by fiscal 2027, in line with its aim to reach capacity of 110-130 metric tonne (MT) by 2031. It will also invest in waste heat recovery system (WHRS), solar power capacities and efficiency optimisation projects. However, finer details of these additional expansion plans are yet to be announced.

Any further large, debt funded capex or acquisition, resulting in a significant rise in leverage and debt servicing will be monitorable.

Dalmia Bharat is the listed holding company of the cement business of the Dalmia Bharat group. It owns 100% of Dalmia Cement (Bharat), which is the main operating company and houses the entire cement business of the group. DBL also owns 100% in Dalmia Power (non-operational company). At a standalone level, it derives revenue from providing management services to group companies.