Dalmia Bharat's Q1FY17 operational performance came better than estimates. Revenue was broadly in-line at Rs 17.8 bn (+10% YoY) while EBITDA of Rs 5.1bn mn (+28% YoY) came 16% higher than our estimates primarily on account of lower than expected others cost. Consolidated PAT increased significantly by 78% YoY to Rs 940 mn led by better operating performance. Going ahead, operational performance is expected to improve further led by strong volume growth and improvement in margins. We estimate EBITDA CAGR of 18% and PAT CAGR of 80% during FY16E-18E. However, valuation at 8.1x EV/EBITDA FY18E looks fair (post the recent stock run up) and factors in most of the positives. Downgrade to Hold with revised target price of Rs 1530.