Sharekhan's research report on Dalmia Bharat
As per our channel checks, trade cement prices in the East corrected by ~12% Q-o-Q in Q4FY2024, led by a sharp correction in March 2024, compared to ~ a 7% Q-o-Q dip in Pan-India trade cement prices. Eastern cement demand has been healthy during Jan-Feb 2024 and is expected to result in double-digit volume growth for Dalmia in Q4. EBITDA/tonne impact is to be limited up to Rs. 200/tonne q-o-q. It remains on track to close FY2024 with 46.6 MTPA cement capacity while staying committed to 75 MTPA and 110-130 MTPA by FY2027 and 2031, respectively. JP asset deal closure is likely to get delayed from March 2024-end.
Outlook
We retain a Buy on Dalmia Bharat with a revised PT of Rs. 2,600, as we factor in downwardly revised estimates and consider ~20% price correction in over two months offer buying opportunity with regional cement price correction fairly factored-in.
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