India’s cement industry is not short of giants. UltraTech Cement towers above all, with Ambuja, ACC and Shree Cement trailing but formidable. For years, the market has been defined by these names. But beneath this dominance, two challengers are shaping up — Dalmia Bharat and JK Cement.
Both have been around for decades. Both are investing heavily today. Both are growing into national names. Yet they could not be more different in how they go about it. Dalmia is chasing size with urgency, trying to scale up capacity at breakneck speed. JK Cement is moving more deliberately, keeping a closer eye on costs, returns and discipline.
The big question is: who will be India’s next big cement player?
The Race to Add Capacity
For Dalmia Bharat, the answer lies in tonnes.
Its strategy is to build capacity fast enough to narrow the gap with the leaders. The company has 49.5 million tonnes (mt) of capacity today and a Rs 68 billion capex pipeline underway. New units in Andhra Pradesh, Tamil Nadu, Assam and Maharashtra will push it to 62 million tonnes by FY28. The stretch goal is 75 million tonnes, which would place it almost level with larger players.
JK Cement has no such sprint in mind.
From 25.3 million tonnes today, it has approved a Rs 48 billion project in Jaisalmer to add 4 million tonnes of clinker and 7 million tonnes of grinding capacity. That, along with smaller projects, will take it to 39 million tonnes by FY27 and 50 million tonnes by FY30.
On the face of it, the numbers make Dalmia look like the more aggressive contender. But capacity is not everything in cement. Where that capacity is located often matters more.
Geography is Destiny
Cement is heavy. Beyond a certain distance, freight costs can wipe out margins. Which is why cement is best seen as a regional business.
Dalmia’s plants are concentrated in the South and East. Tamil Nadu, Andhra Pradesh, Odisha and Assam are its strongholds.
These are growing markets, but they are also highly competitive. Pricing swings are frequent. In Q1FY26, Dalmia’s realisations rose 9% sequentially to Rs 5,074 per tonne.
That was good news for the quarter, but it also shows how dependent profitability is on regional pricing cycles.
On the other hand, JK Cement’s footprint is in the North and Central regions. Its base is Rajasthan, from where it reaches Punjab, Haryana, Uttar Pradesh, Madhya Pradesh and Gujarat.
These markets are relatively more stable on pricing. The location also helps keep freight costs down, with grinding units strategically placed close to demand centres.
The geography of the two companies shows their different approaches. Dalmia is betting on regions with potential upside but also volatility. JK is sticking to markets where pricing discipline has historically been stronger.
Profitability Per Tonne
In cement, investors focus on EBITDA (earnings before interest, taxes, depreciation and amortisation) per tonne.
It captures how much profit a company gets out of every tonne sold.
For Dalmia, Q1FY26 was a standout: Rs 1,261 per tonne, the highest in four years.
But for FY25, the average was only Rs 820.
The swings have been large.
Meanwhile, for JK Cement, Q1FY26 EBITDA per tonne was steady at around Rs 1,247. For FY25, the average was close to Rs 1,010.
JK Cement’s numbers are better and more stable.
Its future projects are also structured to break even at Rs 1,100–1,200 per tonne.
The difference is simple. Dalmia can produce higher peaks, but JK is more predictable. In a cyclical business, that predictability has value.
The Cost Equation
Every tonne of cement carries costs for power, fuel, freight and raw materials. Efficiency here decides margins.
Dalmia positions itself as a low-cost producer.
In FY25, its total cost was Rs 4,188 per tonne, supported by high blending and tight raw-material control. It has built a large renewable base, but freight is a drag given inter-regional movement.
Looking ahead, management has reiterated a two-year plan (announced from Q1 FY26) to cut costs by Rs 100-120 per tonne, led by higher renewable usage and logistics optimisation. They expect the first visible impact from H2 (second half of the financial year) this year, with logistics benefits starting to show by Q4 and into next year.
JK Cement benefits from location (Rajasthan limestone and plants close to customers), which keeps freight lower. On future savings, management said they have already achieved an “exit” run-rate of about Rs 75 per tonne through lower logistics rates and green power, and could add roughly Rs 25 per tonne more during FY26. On a full-year average basis, they guided to about Rs 40 per tonne savings in FY26 versus last year, and a further Rs 40–50 per tonne year-on-year in the next fiscal.
Both companies are efficient, but the levers differ: Dalmia pushes harder on energy and network optimisation; JK leans on freight discipline and a rising green-power mix.
Returns and Capital Discipline
Expansion adds tonnes, but the real question is whether it delivers returns above the cost of capital.
Dalmia’s ROCE (return on capital employed) in FY25 was ~8%. With Rs 40 billion annual capex lined up through FY27, returns will likely remain muted until new plants begin contributing. Net debt could peak at Rs 50 billion, though management has guided for net debt/EBITDA to remain below 2x.
JK Cement has historically delivered returns comfortably above its cost of capital. Its ROCE is at 14%. With Rs 70 billion of planned capex through FY28, net debt is expected to peak at Rs 40 billion. Net debt/EBITDA will remain below 1.5x as well. That discipline helps sustain investor confidence.
The Market’s Verdict: Re-rating
Perhaps the most telling signal comes from the market. Re-rating reflects investor conviction in a company’s future.
For Dalmia Bharat, the market is currently paying above the 5-year EV/EBITDA (enterprise value to EBITDA) average. Broker models still anchor near 12.5x. The spread exists because the story needs proof: ramp new capacity on time, hold EBITDA/tonne as fuel and freight move, and keep net-debt/EBITDA within the stated guardrail.
If these show up in the next few quarters, the multiple can move up the ladder.
JK Cement also above its 5-year average, but brokers are comfortable at ~18.5x. The reason is simple: the Street is baking in JK’s past record of on-time execution, steadier EBITDA/tonne, leverage kept below ~1.5x, and incentives that lower project hurdles. Geography keeps freight in check and the capex path is clearer.
With cash flows more visible, the multiple is higher.
Both have re-rated versus history. JK earns a “discipline premium.” Dalmia can close the gap by converting plans into steady, per-tonne profits while keeping the balance sheet within its own rules.
Sprint or Marathon?
Dalmia is the sprinter. It is pushing hard to build capacity quickly, even if that means carrying more debt and enduring volatile margins. If demand holds strong, this could pay off.
JK is the marathoner. It is building steadily, adding capacity with subsidies, keeping costs tight and focusing on returns. This steadiness may lack drama, but it is often what compounds over the long term.
The Larger Lesson
The duel between Dalmia and JK is not just about two companies.
It is about two approaches to growth in a commoditised industry. One prioritizes size. The other prioritizes discipline.
For investors, the lesson is clear. Size can dazzle, but it is returns and predictability that sustain valuations. The market’s re-rating of the two companies underlines this.
In cement, as in investing, sprinting can win headlines. But it is the marathon pace that often wins the race.
Disclaimer
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.
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