KR Choksey recommended accumulate rating on Dalmia Bharat with a target price of Rs 3325 in its research report dated November 09, 2017.
KR Choksey's research report on Dalmia Bharat
Net Sales stood at INR 18337 mn as against our estimates of INR 18150 mn; which was up by 7% y-o-y and down 10.4% q-o-q. Volumes for the quarter stood at 3.64 MT(est of 3.66 MT) which grew by 6.4% y-o-y. EBIDTA stood at INR 4414 mn which was up by 4.9% y-o-y and down 20.7% q-o-q and EBIDTA margin stood at 24.1% (est. of 23.4%) as against 24.6% same quarter last year. EBITDA stood 3.9% higher than our estimates of INR 4250 mn while EBITDA/ton during the quarter stood at INR 1211. PAT stood at INR 1037 mn (est. of INR 510 mn) which grew by 233.4% y-o-y and down by 36.7% q-o-q. Sharp jump in net profit on y-o-y basis was on account of higher tax base.Outlook
We value Dalmia Bharat Ltd at an EV/EBITDA of 12x FY19E on account of a.)financial de-leveraging, b.) outperforming volume growth, c.) robust market share of 8%/15%/21% in South/East/North-East and d.) superior operating efficiencies; arriving at a target price of INR 3325 translating into an upside of 13.5% from CMP of INR 2930. We have an ACCUMULATE rating on the stock.
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