Buy Dalmia Bharat; target of Rs 2300: HDFC Securities

HDFC Securities' research report on Dalmia Bharat

In Q1FY24, Dalmia reported 12% YoY volume growth. However, unit EBITDA contracted INR 70/MT QoQ to INR 872/MT, on elevated input and freight costs. We estimate the company will deliver an 18% volume CAGR during FY23-25E on ongoing expansions and market share gains. We estimate unit EBITDA will rebound to >INR 1,000/MT H2FY24 onwards, benefitting from fuel cost reductions, the rising share of green power and op-lev gains (as utilization rises). Dalmia remains among our top picks in the cement sector.

Outlook

We maintain our BUY rating on Dalmia Bharat with a TP of INR 2,300/sh (13x its Mar-25E consolidated EBITDA). We continue to like Dalmia for its healthy volume, margin, and comfortable balance sheet outlook.

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