Motilal Oswal's research report on Dalmia Bharat
DALBHARA in its FY23 annual report highlighted: a) long-term expansion plans – grinding capacity of 75mtpa/110-130mtpa by FY27/FY31; b) sustainability initiatives to improve profitability – reduction in clinker factor to 58.5%, rise in blended cement mix to 84%, increase in thermal substitution rate (TSR) to 17% and increase in renewable energy (RE) share to 29% (including RE share of grid electricity consumed); c) initiatives toward logistics optimization; and d) maintaining leverage at a comfortable level – net debt-toEBITDA below 2x.
Outlook
We value DALBHARA at 13x FY25E EV/EBITDA to arrive at a TP of INR2,550, an upside of 14% from current levels. We maintain our BUY rating on the stock.
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