Sharekhan's research report on Dalmia Bharat
In Q2FY2025, Dalmia reported broadly in-line consolidated revenue, led by higher-than-estimated volume growth. Operational profitability miss was led by lower-than-estimated realisations. Management has reduced its volume growth guidance for FY2025 to 9% y-o-y from 12% y-o-y, anticipating lower industry growth rate, while it continues to eye volume growth of 1.5x that of industry growth. Operating cost reduction target of Rs. 150-200/tonne over three years stays intact. Dalmia is actively working on achieving its medium-term capacity target of 75 mtpa by FY2028. The company remains committed to 110-130 mtpa capacity by 2031.
Outlook
We retain BUY on Dalmia with a revised PT of Rs. 2,200, rolling forward our valuation to H1FY2027E earnings, which partially offsets downward revision in earnings estimates.
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