Buy Dalmia Bharat; target of Rs 2300: Motilal Oswal

Motilal Oswal is bullish on Dalmia Bharat recommended buy rating on the stock with a target price of Rs 2300 in its research report dated April 24, 2025.

Broker Research

April 25, 2025 / 22:56 IST

Buy

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on Dalmia Bharat

Dalmia Bharat (DALBHARA)’s 4QFY25 EBITDA increased ~21% YoY to INR7.9b (6% miss, due to lower-than-estimated volume). EBITDA/t was up ~24% YoY at INR922 (est. INR946). OPM surged 4.2pp YoY to ~19% (est. ~20%). Profit (adj. for prior-period tax reversals) grew ~41% YoY to INR3.6b (~28% beat, led by higher other income, and lower depreciation/ETR than expected). Management indicated that cement demand saw a recovery in 4QFY25 with industry growth rate estimated at 7-8% YoY v/s 3-3.5% YoY in 9MFY25. It expects cement demand to grow ~7-8% YoY in FY26, led by increased government spending and pent-up demand. Management refrained from giving any company-specific guidance for FY26; though the focus would be on balancing the volume growth and profitability. Recently, cement prices have surged in South India (INR30-40/bag), while blended average price increase in company’s markets is INR10-15/bag.

Outlook

We raise FY26/27E EBITDA estimates by ~2%/6% on higher realization assumptions. EPS estimates increased by ~22%/8% for FY26/27, aided by lower depreciation estimates. We value DALBHARA at 12x FY27E EV/EBITDA to arrive at a revised TP of INR2,300 (earlier INR2,150). Reiterate BUY.

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