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Dalmia Bharat Ltd

You are Here : Home > Markets > CompanyInformation > Company Background
BSE Code : 542216 | NSE Symbol : DALBHARAT | ISIN : INE00R701025 | Industry : Cement |


Chairman's Speech

Staying on a high growth path

Dear Shareholders,

FY23 was an eventful year for India and the world. While escalating geopolitical tensions and supply chain constraints raised commodity and energy prices to historically highs, and incited recessionary fears, the Indian economy was an epitome of resilience, aided by structural strengths and the government?s thrust on infrastructure-led growth. India battled high inflation and the consequent rise in interest rates, but there were no detrimental consequences to consumption or investments.

At Dalmia, we believe that our future is intertwined with that of

India?s ambitions. As India marches ahead to become a developed nation by 2047, we view ourselves as a reliable partner in this progress as well as in the nation?s commitment to creating a green and sustainable future. Over the past decade, we have grown 4x in capacity, 5x in revenue, and 4x in EBITDA, becoming the fourth-largest player the cement industry in India. We have embarked on an aggressive expansion path to become a pan-India pure play cement company and address the country?s diverse development needs, with sustainability as a core strategic imperative. In this context, it gives us immense pleasure to present to you our seventh Integrated Annual Report that encapsulates how we have emerged stronger and resilient, navigating challenges, adapting to evolving market dynamics, and delivering sustainable value to our stakeholders. The strong performance across financial and non-financial parameters speaks volumes about our strong fundamentals and ability to capitalise on the India growth story.

Well positioned in a buoyant market

Over the past few years, India has focused on strengthening its infrastructure backbone to drive overall growth and development.

The Union Budget FY24 raised the allocation for essential infrastructure by 33%, while the Pradhan Mantri Awas Yojana (PMAY) received a 66% higher outlay. Additionally, there is a record-high outlay allocated for railways for the next 10 years, and there are plans to build 50 new airports. Significant public spending on infrastructure has also created an enabling environment for private investors. Real estate sector has been showing strong traction with low inventory levels and launch of various new projects. We believe the demand for cement will remain strong in the years ahead, which bodes well for our strategic objectives to expand our footprint across the country.

At Dalmia, we are making steady progress towards our target to take our manufacturing capacity to 110-130 MTPA by 2031. During FY23, we expanded our cement manufacturing capacity by almost 15%, from 35.9 MTPA to 38.6 MTPA, and to 41.1 MTPA in Q1FY24.

Strong performance despite challenges

During FY23, we have delivered an industry leading volume, growth of 15.9% YoY while our revenue grew by 20% YoY to 13,540 crore. While our PAT stood at 1,079 crore, up 27.6% YoY. In April 2023, we also started operations at our second cement line in Bokaro, Jharkhand, with a capacity of 2.5 MTPA. We also signed the definitive agreement for the acquisition the strategically located cement assets of

Jaiprakash Associates Limited, which will enable us to enter the lucrative growth market of central India.

People at the core of our growth agenda

Our people make us who we are, and we are grateful to our immensely talented team and their contribution to driving our business forward. Growing at the pace that we are, it is important to create and nurture a large pool of young leaders to realise our vision for Dalmia 2.0. We have significantly invested in our human capital and have always prioritised creating a safe and work environment for our people creating a positive and safe work environment. We have set in motion a HR transformation programme. Through this, we aim to streamline our organisation structure, build a diverse workforce, upskill our employees, focus on succession planning, relook at the incentive structures and update our policies, among others. We have also launched

‘Lakshya?, a leadership development programme that includes a set of metrics that focus on retaining employees while measuring their performance. The includes It personalised leadership, coaching, training, and programmes for career development.

Delivering excellence and value

For us, having a positive impact on our stakeholders is of utmost importance. We believe in doing business with integrity and the highest ethical standards in all our operations. We strive for excellence in everything we do, from our products and services to our relationships with all our stakeholders. Through our operations, we ensure that we deliver profitable and sustainable shareholder returns to our financial capital providers, while consistently innovating our products and services for our customers. We are deeply committed to our social responsibility, with an intent to bring positive change in the communities in which we operate. As we move forward, our focus remains on innovation and sustainability. We are investing in cutting-edge technologies, leveraging digitalisation, and fostering a culture of continuous improvement. We are also steadfast in our commitment to sustainability, reducing our environmental footprint, promoting circular economy practices, and contributing to a greener future.

Read more on page 32

Sustainability-a strategic imperative

Our efforts have been globally recognised by the First Mover?s Coalition, backed by the US ofgovernment and the World Economic Forum, Dalmia Bharat is also one of the only 16 global companies to be appointed as a COP26 business leader by the COP26 presidency. We have set a vision of becoming carbon neutral by 2040, and have also joined the RE100, EP100 and EV100 campaigns to, further accelerate our efforts.

We also got the opportunity to be a part of the PM?s delegation to Denmark, under the green strategic partnership of the

Government of India and Denmark. Here we signed an MoU with FLSmidth, Denmark, a cement and technology company, to collaborate and develop breakthrough innovations to support sustainability in the cement industry.

We are committed to ethical business practices and transparency. Our objective is to strengthen our governance structures, ensuring that our decision-making processes are guided by integrity and accountability. We are working towards enhancing our supply chain management practices, working closely with our value chain partners. By operating with the utmost ethical standards, we build trust and credibility with our stakeholders.

Effective capital allocation requires a thorough understanding and management of risks. We employ robust risk management practices to identify, assess, and mitigate risks associated with our investment decisions.

Dalmia Bharat?s ethos are built on trusteeship and giving back to the society. Taking this ahead through our Community Development initiatives, the Dalmia Bharat Foundation directs its efforts towards enabling communities to have a sustainable future, by helping them manage their human and natural capital in an efficient manner. Moreover, we have also received accreditation for our green products from two prominent green rating systems, i.e., GRIHA and CII IGBC. These initiatives and opportunities lay further emphasis on our goal of building a sustainable future.

As a ‘Monument Mitra? of the Red Fort, Delhi, under the government?s ‘Adopt a Heritage

Project?, we are promoting national symbol as a global tourist attraction. For this, Dalmia Bharat has introduced world class amenities and state of-the art shows to deliver a unique experience for all.

There are three major attractions at the Red Fort The Red Fort Visitor Centre, Matrubhumi Projection Mapping, and the Jai Hind Sound & Light show. We provided basic and advanced tourist facilities at the Red Fort in a planned and phased manner to make the monument more tourist-friendly and enhance its cultural importance and potential.

This is a testament to our commitment towards nation building and celebrating India?s incredible cultural heritage.

Way forward

Our future growth roadmap features a mix of organic and inorganic opportunities with a focus on premium products, raw material security, and renewable energy. A few priorities for FY24 include the timely completion of our ongoing capex and the successful integration of the Jaypee

Cement asset. We will work to improve our manufacturing KPIs and also, build long-term raw material security. And last but not least, we will continue to investing in the digital enablement of our Company.

In line with India?s commitment to achieve net zero emissions by 2070 and drive green energy transition, we are prepared to be part of this sustainable growth journey. We remain optimistic about the future and thank all our stakeholders for their immense faith in us. We are grateful to our people for their contribution towards our Company.

Regards,

Gautam Dalmia and Puneet Dalmia

Managing Director(s), Dalmia Bharat Limited

Innovation and collaboration (Innobration)

We are proud to be among the few companies globally to have pledged to become carbon negative by 2040. To achieve this goal, we are collaborating with organisations in India and abroad to understand low-carbon innovations and adopt them in our manufacturing process.

We have collaborated with international technology partner to create a sustainable calcination/clinkerisation mechanism. As part of our R&D efforts, we are constantly putting in the efforts to develop new sustainable products. During the current fiscal year, we successfully introduced two innovative products, namely Dalmia Innosil, a cementitious material derived from sugar industry waste, designed to compete with SCM (Supplementary Cementitious Materials) such as silica fume and Alccofine. Additionally, we have also developed a water-repellent cement, further expanding our product portfolio This innovative solution further contributes to our commitment towards reducing our carbon footprint and promoting sustainable practices.

Our commitment to becoming carbon negative led us to release a roadmap with time-bound targets until 2040. We also became a founding member of the First Movers Coalition and the UN?s platform LEADIT for zero carbon roadmaps in heavy-industry sectors. We are climate catalysts in the global heavy-industry sector, inspiring over 60% of global cement capacity to commit to becoming Net Zero by 2050.

We are leading the way towards a greener future by setting new benchmarks and expanding our climate action efforts globally. Carbon capture and utilisation for future

 

technology, which captures CO2

use, acts like a ‘climate vaccine? for the industry. This technology can reduce up to

60% of the GHG emissions from cement production. We accomplished a significant Thermal Substitution Rate (TSR) of 17% this year. This was achieved through the substitution of fossil fuels with various environmentally friendly alternatives, such as industrial wastes, municipal solid waste, renewable biomass (including bamboo and plantation sources), and hazardous waste. We also invest in innovative ways of working, cutting-edge technologies, and digitalisation to reduce our carbon footprint. In addition to creating sustainable products like low-carbon cement, we are influencing consumer choices towards green products and services.

We are cognisant of the fact that we operate within a broader social context and have a responsibility to give back. Throughout the year, we have actively supported local communities through various initiatives, including volunteering and partnerships with various organisations. Our CSR activities and processes are evaluated in alignment with ISO 26000 standard, making us the first Indian cement company to do so. Our community development initiatives focus on promoting sustainable livelihoods, climate action, and social infrastructure. We are proud our sustainability efforts, have earned recognition and that includes the CII Climate Action Programme Award, Supply Chain Management Awards, Green Leaf Award for Environment Excellence and the CII-ITC Sustainability Awards 2022 for ‘Excellence in Corporate Social

Responsibility?.

Digitisation

The implementation of digital solutions has revolutionised our business processes, resulting in the elimination of human errors and achieving an unprecedented level of data accuracy. Our adoption of various digital initiatives across ESG, logistics, manufacturing, procurement, and mining has significantly improved operational planning, leading to increased sales and profitability. We utilise in-house applications, Kavach and Fiori, for safety observation, inspection reporting, and real-time equipment monitoring. Technological solutions like VENDX and SAP Ariba improve tracking, transparency, and digitisation in our supply chain, enhancing decision-making and customer focus.

In addition, these measures deliver the added benefit of reducing our carbon footprint, thereby contributing towards our sustainability targets. We partnered with

FLSmidth, a cement tech provider, under India Denmark Green Partnership to scale our next-gen decarbonisation technologies.

Looking forward

We are optimistic about the future based on a robust demand outlook, steady cement prices and the peak of commodity price inflation behind us. We expect profitability to gradually improve from here on, and we remain focused on delivering value to our stakeholders. We extend our heartfelt appreciation to all our stakeholders for believing in our journey. I would like to conclude by quoting an ancient text, which very well summarises our thoughts for the future.

Nothing is impossible for those having the six virtues of Knowledge, Logic, Science, Memory, Readiness, and Ability to function Warm regards,

Mahendra Singhi

Managing Director & CEO

Dalmia Cement (Bharat) Limited