Reduce Dalmia Bharat: target of Rs 1800: Emkay

Emkay recommended reduce rating on Dalmia Bharat with a target price of Rs 1800 in its research report dated July 19, 2024.

Broker Research

July 24, 2024 / 12:24 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay's research report on Dalmia Bharat

We downgrade Dalmia Bharat to REDUCE from Buy owing to limited growth catalysts due to i) uncertainty over the Jaypee deal—as admitted to the NCLT by lenders—impacting the company’s market diversification and delaying its plans of becoming a pan-India player; ii) no major announcement on near-term organic plans; and iii) limited levers for cost improvement, in our view. We exclude acquisition of JP assets from our estimates, implying lower volume growth. Prices in its key markets like the South and East are likely to remain volatile owing to capacity additions. Accordingly, we now build-in ~8% volume CAGR with EBITDA/t in the Rs900-1,000 range over FY24-27E. Also, factoringin lower cement prices,

Outlook

We cut our EBITDA estimates by 7-16% for FY25-26. Stripping out the JP assets, we see limited potential for any stock re-rating for Dalmia. Accordingly, we cut our target EV/E to 11x (vs 12.5x earlier) and revise down our Jun-25E TP to Rs1,800/share, post quarterly roll-over.

For all recommendations report, click here