Buy Dalmia Bharat; target of Rs 3162: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Dalmia Bharat

4Q cement volumes grew 17% YoY to 4.55mt (est. of 3.93mt), as volume growth ex-OCL was 28% YoY due to higher volumes from south/north-east and higher sales in MP/Chhattisgarh. Pure cement realizations were flat QoQ (-1% YoY) at INR 4,725/t, despite weaker realizations in focus markets, due to higher proportion of premium sales.

Outlook

We expect valuation multiple for the company to catch up with large caps, given improving balance sheet and earnings CAGR of 50% over FY17-FY19. We value DBEL at 13x FY19E EV/EBITDA, at 20% discount to peers due to 50% exposure to the south market and arrive at a TP of INR 3,162, implying 25% upside. Buy.

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