Buy Dalmia Bharat; target of Rs 2620: Choice Equity Broking

Choice Equity Broking's report on Dalmia Bharat

We maintain our BUY rating on Dalmia Bharat Ltd. (DALBHARA), with a TP of INR 2,620. We continue to be positive on DALBHARA owing to: 1) Addition of ~25.5 Mtpa capacity by FY28E in new untapped regions at a reasonable capex outlay, 2) Long-term structural benefits from GST rate cut, 3) Execution on optimisation program to cut cost by INR 150– 200/t by FY28E, with increase of renewable energy capacity to 576MW by FY26E vs 387 MW in Q2FY26, 4) Sector tailwinds – demand rebound and healthy pricing level across markets, 5) Disciplined capital allocation and 6) Expansion in ROCE by 678 bps over FY25– 28E.

Outlook

On our TP of INR 2,620, FY28E implied EV/EBITDA/PB/PE multiples are 10.9x/2.3x/23.1x, which are modest in our view.