Buy Dalmia Bharat; target of Rs 1470: HDFC Securities

HDFC Securities' research report on Dalmia Bharat

Dalmia Bharat (DBEL) reported a strong 3QFY21 performance, led by robust volume growth (production ramp-up in east), healthy pricing (south-led) and continued cost controls. DBEL continues to gain market share in both east and south regions. Consolidated net sales/EBITDA grew 18/51% YoY to INR 28.6/6.9n respectively. DBEL has also used its cash balance to reduce debt. We continue to like the company for its continued strong volume and margin performance. Despite major ongoing expansions, the balance sheet remains well under control.

Outlook

We maintain our BUY rating on the stock with a revised target price of INR 1,470 (10.5x Dec’22E consolidated EBITDA).

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