Dalmia Bharat Ltd. share price target

Forgettable quarter. DALBHARA’s 3QFY22 EBITDA, in line with our estimates, declined sharply (-41% yoy, 26% qoq) due to a triple whammy of weak demand, higher costs and weak prices. However, we see the worst operating performance behind and expect stronger demand, higher prices and abating cost pressures in the coming quarters.

DBL reported revenue de-growth of 4%YoY due to 1.7%YoY decline in volumes impacted by unseasonal rains in East region and 3.5%YoY decline in realisation. The company has taken price hike of ~Rs10-20/bag in January. DBL has commercialized 2.9MT Murli plant in Maharashtra (recent acquisition) in Jan 2022. The ongoing capacity expansion and the ramp up in acquisitions will support future volume growth. The additional capex is for Rs.50bn to reach 48.5MT by FY24. We factor revenue growth of ~14% CAGR over FY22E-24E supported by capacity expansion/acquisitions and improvement in premium/trade mix....

We roll over our estimate to FY24E and value the company at 11x FY24E EV/EBITDA, to arrive at a target price of Rs1945/share. This implies an upside of 9% from the CMP and hence we change our rating from BUY to HOLD.

Targets to operate recently commissioned operations of Murli industries' 3mtpa plant in Maharashtra at 60% in FY23e Dalmia Bharat (DALBHARA) reported Q3FY22 EBITDA below ours/consensus estimates (CE) by 20%/33%. The miss was primarily due to steeper than...

Dalmia Bharat (Dalmia) reported inline EBITDA, as sharper than expected drop in realisations was offset by cost control measures. Volumes reported marginal growth of 4% QoQ (+6% YoY), as the core markets were impacted by heavy monsoons. Cement realisations declined by 7% QoQ (+2.5% YoY; -2% vs. JMFe), owing to sharp drop in prices in East/South.

2QFY22 EBITDA was 6% ahead of our estimates with lower costs more than offsetting pricing pressure in East with 7% qoq lower realization. Divestment of non-core investments (IEX, Hippo) and focus on organic growth will help address investor concerns on capital allocation. The company would reach 36 mtpa capacity in FY2022E and is embarking on the next phase of expansion.

Dalmia Bharat's (DBEL) 2QFY22 results surpassed our estimates as the company benefitted from lower freight costs (-7% QoQ). EBITDA came in at INR6.2b v/s estimated INR5.4b and EBITDA/t at INR1,218 v/s estimated INR1,118. Profit stood at INR2.2b v/s estimated INR1.6b. DBEL has commenced commercial production at its 2.25mt grinding unit (Line 2) in Cuttack, Odisha and has also begun trial-runs at the acquired plants of Murli Industries (3mt grinding capacity in Maharashtra). We estimate DBEL to achieve a sales volume CAGR of 10.8% over FY21-24E,...

We maintain our BUY rating on the stock and value the company at 13.5x FY23E EV/EBITDA, to arrive at a target price of Rs2,520/share, implying an upside of 27% from the CMP.

Dalmia Bharat (DALBHARA) reported Q2FY22 EBITDA in line with our expectations. EBITDA for the quarter was benefited by incentive income of Rs600mn related to Bihar unit (including Rs490mn of FY20 and FY21) and one-time rebate of Rs150mn on railway freight. Adjusted for the same,...

We value DBL at 13.5x FY23E EV/EBITDA and arrive at a TP of Rs 2450/ share. We assign a BUY rating to the company with an upside potential of 19% from CMP.