Dalmia Bharat Q2 FY27 Results Analysis: EBITDA Margin Compresses 653 bps, Leverage Breaches 2:1 Threshold (DALBHARAT)

Dalmia Bharat Ltd reported Q2 FY27 numbers with revenue of Rs. 3,563.00 Cr (+4.30% YoY) and PAT growth of -187.70% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Dalmia Bharat swung to a reported loss of Rs.(207) Cr as EBITDA margin collapsed 653 bps YoY to 13.84%, directly contradicting management's prior 'no margin compression' guidance, with power & fuel costs up 21.9% YoY. Leverage breached the guided 'comfortably below 2:1' threshold at a derived 2.07x after the Rs.2,850 Cr JAL acquisition, and H1 FCF was negative Rs.(948) Cr. Positives are limited to the MMDR Act-driven extinguishment of the ~Rs.279 Cr MBLT contingent liability and capex tracking guidance.

Key Investment Insights

Key Positives

• Revenue grew 4.3% YoY to Rs.3,563 Cr, reflecting the first full quarter of JAL consolidation (acquired May 29, 2026 for Rs.2,850 Cr enterprise value)
• MBLT contingent liability of ~Rs.279 Cr (PV Rs.198 Cr) extinguished following the August 22, 2026 MMDR Act amendment
• Freight on internal clinker transfer fell 17.0% YoY, improving 0.56 pp as a share of revenue
• H1 capex of Rs.1,420 Cr is on track against FY27 guidance of Rs.3,200–3,400 Cr
• Standalone revenue grew 38.8% YoY to Rs.111 Cr with PAT of Rs.15 Cr
• Interim dividend of Rs.4/share (Rs.76 Cr total) declared October 26, 2026

Risk Factors

• EBITDA fell 29.2% YoY to Rs.493 Cr with margin compressing 653 bps YoY to 13.84%, contradicting management's 'no margin compression' guidance
• Reported loss to owners of Rs.(207) Cr; normalized PAT of ~Rs.34 Cr still down 85.7% YoY
• Power and fuel costs rose 21.9% YoY (+3.55 pp of revenue) and other expenses rose 24.2% YoY
• Gross debt rose to Rs.9,582 Cr from Rs.6,752 Cr at March; derived net debt/LTM EBITDA of 2.07x vs guided 'comfortably below 2:1'
• H1 FCF was negative Rs.(948) Cr; cash and equivalents fell to Rs.89 Cr
• Pending Bawri/DCNEL litigation and IL&FS mutual-fund-unit matter (Rs.344 Cr units; Rs.400 Cr guarantees) flagged as Emphasis of Matter with no provision