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.
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.
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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