Motilal Oswal's research report on Dalmia Bharat
Dalmia Bharat (DALBHARA)'s 4QFY22 performance was above our estimates primarily driven by better realization (4% above estimates). EBITDA was at INR6.8b v/s estimated INR5.3b and OPM was at 20.2% v/s estimated 16.8%. However, higher costs (up 10% YoY) continued to impair margins (OPM dipped 4.2pp YoY and EBITDA/t was down 13% YoY). We cut our FY23E/ 24E EBITDA by 2%/4% considerindg higher energy costs. This along with likely higher interest expenses leads to our EPS reduction of 11%/4% in FY23E/24E, respectively. We like the stock owing to its growth plans, locational advantage in East India and cost reduction measures.
We maintain our BUY rating with a TP of INR1,915 (v/s INR2,000 earlier), based on 12x FY24E EV/EBITDA.
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