Hold Dalmia Bharat; target of Rs 2525: Emkay Global Financial

Emkay Global Financial recommended hold rating on Dalmia Bharat with a target price of Rs 2525 in its research report dated September 28, 2023.

Broker Research

October 03, 2023 / 15:15 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Dalmia Bharat

Dalmia Bharat is expected to benefit from the sharp price hike of ~Rs45-50/bag in Sep-23, in the East. Besides, the South has announced price hikes, of Rs70- 80/bag wef Oct-23. Both regions contribute more than 80% of Company volume. Absorption/sustenance of the price hikes is a key monitorable. Dalmia targets increasing capacity to 75/110-130mt by FY27/31, resp. (~15% CAGR), with ~80% of upcoming capex likely to be funded via internal accruals over FY23-26E. This will keep Company’s balance sheet (BS) at a comfortable level, with net debt-to-EBITDA under 1.5x. Factoring-in the higher realization, we raise FY24-26E EBITDA by 6-9%.

Outlook

Given Company’s growth visibility and strong BS, we nudge up our target EV/E by one notch to 12x (earlier 11x) and revise Sep-24E TP to Rs2,525/sh, post quarterly roll-over; we maintain HOLD.

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