Mar 20, 2017 04:14 PM IST | Source: Moneycontrol.com

Buy Dalmia Bharat; target of Rs 2415: Axis Direct

Axis Direct is bullish on Dalmia Bharat has recommended buy rating on the stock with a target price of Rs 2415 in its research report dated March 17, 2017.

Buy Dalmia Bharat; target of Rs 2415: Axis Direct
Axis Direct's research report on Dalmia Bharat

Dalmia is one of the dominant players in North East. Market is dominated by 3 players – Dalmia, Star Cement and Meghalaya Cement. Dalmia and Star Cement are almost of similar size, while others are much smaller.

Outlook

Dalmia Bharat (DBL) stock has rerated over the last 3 years due to cost reduction and expansion, but a further rerating is expected due to rising capacity utilization and balance sheet deleveraging. Hence it has the potential to double in 3 years (refer Pg6) based on the above + high visibility on earnings (asset sweating, volume growth, and lower interest costs and simplification of holding company structure. Maintain BUY with revised target price of Rs 2,415 (12x FY18E EV/EBITDA) vs. Rs 2,146 earlier.

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