Accumulate Dalmia Bharat; target of Rs 1988: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dalmia Bharat

Dalmia Bharat (DALBHARA) reported weak performance in Q3FY25 led by volume decline (-1.5% YoY) due to absence of JP tolling volumes. Demand was modest in the first half of the quarter but gradually improved post festivities across key regions. Average NSR improved 3.4% QoQ as cement prices showed improvement across regions in the quarter and trade mix also improved to 66%. Freight costs remained elevated as well due to servicing of central region markets from own eastern plants. As RM costs declined due to lower input prices and falling petcoke prices aided P&F costs, EBITDA/t was in line with PLe.

Outlook

We expect revenue/EBITDA/PAT CAGR of 10%/13%/22% over FY24-27E. At CMP, the stock is trading at 10.9x/9.3x EV of FY26E/FY27E EBITDA. We maintain ‘ACCUMULATE’ rating with TP of Rs1,988 (Rs2,017 earlier) valuing at 11x EV of Sep’26E EBITDA.