KR Choksey's report on Dalmia Bharat
Dalmia Bharat Ltd (DBEL) is currently positioned as the fourth largest cement company in India and possesses a manufacturing capacity of 25 MTPA and a captive power capacity of 186 MW. DBEL enjoys a healthy presence in South, East and North-East (NE) with manufacturing capacity of 12.1 MTPA (48%) located in South and 12.9 MTPA (52%) located in East (incl. NE).
Outlook
Consequently, we value Dalmia Bharat Ltd at an EV/EBITDA of 12X FY-19E arriving at a target price of INR 2540/share translating into a 34% upside from the current price of INR 1897/share subject to further re-rating depending upon the pace of debt reduction and margin sustainability.
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