Buy Dalmia Bharat; target of Rs 1480: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dalmia Bharat

Dalmia Bharat (DALBHARA) reported Q3FY21 EBITDA in line with our estimates and above consensus estimates (CE) by 4%. Performance stands out given its high exposure to highly price competitive East region (45% of its volumes) currently at near 7-year low. Underpinned by 1) highly efficient operations- ranks fourth on margins in the sector, 2) sizeable operations- 4th largest player with 29mnt capacity (growing to 39mnt by FY23) and 3) attractive valuations- EV/EBITDA: 9.2x/7.4x FY22e/FY23e at near 50% discount to its peers, we remain positive on the stock.

Outlook

We maintain BUY rating with TP of Rs1,480, EV/EBITDA of 9x FY23e.