Accumulate Dalmia Bharat; target of Rs 2395: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dalmia Bharat

Dalmia Bharat (DALBHARA) reported a strong operating performance in Q1FY26, driven by better pricing. Average NSR rose 8.7% QoQ, aided by price recovery in the Eastern and Southern regions post Mar’25. Volumes remained flat YoY (ex-tolling) with the company's focus on profitable volume growth. Higher prices and lower traded goods led to EBITDA/t rising to Rs1,261. Cement prices remained relatively stable in July, which should support earnings. DALBHARA also reiterated its confidence in achieving cost savings of Rs150– 200/t by end FY27E and is actively exploring levers to achieve this, though mineral bearing tax bill by TN govt. would keep the RM costs up.

Outlook

We expect EBITDA CAGR of 33% over FY25-27E. At CMP, the stock is trading at 12.5x/10.4x EV of FY26/FY27E EBITDA. We maintain ‘Accumulate’ rating with revised TP of Rs2,395 (Rs2,303 earlier) valuing at 11x EV of Mar’27E EBITDA.