Buy Dalmia Bharat; target of Rs 930: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on Dalmia Bharat

We retain BUY on Dalmia Bharat with a TP of Rs 930. We like the co for its distribution strength across its markets and healthy balance sheet. Covid lockdown in Mar-20 and weak pricing pulled down consol rev/EBITDA/APAT 11/16/86% YoY. A weak 4Q slowed FY20 rev/EBITDA growth to 1/9% YoY. FY20 unitary EBITDA remained buoyant at Rs 1,091/MT (+6% YoY) led by lower input costs and asset sweating. APAT fell 23% YoY on higher dep and tax outgo. Despite large capex in FY20, Dalmia reduced net debt ~11% YoY.

Outlook

We maintain BUY with unchanged TP of Rs 930 (10x its FY22 EBITDA, in-line its five year mean). Our TP implies replacement cost of Rs 5.6bn/MT.

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