Dalmia Bharat Ltd.(Old) share price target

We maintain Buy rating with a new Target of Rs985. Q3FY20 revenue grew by 11.7%YoY supported by 14%YoY growth in volumes but blended realisation declined by ~2%YoY. EBITDA per ton improved to Rs896 Vs Rs850 YoY supported by volume growth and reduction in costs. Total expenses per Ton declined by 3.7% YoY (2.4%QoQ). For the recent acquisition (Kalyanpur cement-1.1MT), capacity utilisation has improved to 65%, expects to improve further in FY21....

Inventory liquidation to perk up cash flows Considering the company is holding large sugar inventory, monthly sales quota for the company's three UP based mills would be much higher in the next six months. With almost 1 lakh tonnes of exports, higher monthly quota and significant sugar sacrifice through diversion towards B heavy molasses, the company would be liquidating its excess sugar inventories in the next two quarters at higher domestic sugar prices. We expect more than | 350 crore of cash flow from operation by the end of FY20E. The company has...

Q2FY20 revenue grew by 6.5%YoY supported by 8%YoY growth in volumes but blended realisation declined by 1.6%YoY. EBITDA per ton improved to Rs1,063 Vs Rs944 YoY supported by volume growth and reduction in costs. Total expenses per Ton declined by 4.8% YoY (4.2%QoQ). The recent acquisition (Kalyanpur cement-1.1MT) saw a capacity utilisation of 50% in Q2FY20, expects to improve to ~70% by Q4FY20. Expansion of ~7.8MT in East is on track. Clinker capacity of 3.1MT and...

21 October 2019 2QFY20 cement volumes were up 8% YoY to 4.47mt while blended realizations were down 1.6% YoY (-10% QoQ) to INR5,002/t, led by weak pricing in the South/East. Revenue grew 7% YoY to INR22.3b. EBITDA stood at INR4.7b (in line with est.) with margin at 21% (+2.6pp YoY; -5pp QoQ). Company has changed the method of depreciation in its north-eastern capacities from straight line to written- down value method from 1 Jul19. As a result, depreciation charge for 2QFY20/1HFY20 is higher by INR670m/INR840m and deferred tax credit for 2QFY20 and 1HFY20 is higher by INR290m due to higher reversal of depreciation during the tax holiday period. Adj. PAT after minority interest stood at INR 270m v/s INR10m in 2QFY19. Slag prices for the quarter stood at INR1,180/t in 1QFY20 and INR1,385/t in 2QFY19.

We retain BUY on Dalmia Bharat with a TP of Rs 1,470 (12x FY21 consolidated EBITDA). We continue to like Dalmia for its high op margin (of Rs 1,000/MT+ on strong cost controls), expanding regional presence (all India ex-north) and fast growth at prudent cost (capex < USD 70/MT). We value Dalmia at 12x its FY21E consolidated EBITDA (implied EV of USD 143/MT). The stock trades at attractive valuations of 8.3x FY21E EBIITDA and at EV of USD 99/MT.

Q1FY20 revenue grew by 8%YoY supported by 7.8%YoY growth in blended realisation while volume growth was flat due to election. EBITDA per ton improved to Rs1,464 Vs Rs1,160 YoY supported by better realisation and reduction in costs. Raw material, fuel and freight costs have softened during the quarter. DBL has received NCLT approval for its Resolution Plan for the acquisition of Murli Industries (3.1MT in Maharashtra). The recent acquisition (Kalyanpur cement-1.1MT) saw a capacity utilisation of 45% in Q1FY20. Expansion of ~7.8MT in East is on track. 50% of grinding capacity is...

We like Dalmia for its high op margin (of Rs 1,000/MT+ on strong cost control), expanding regional presence (all India ex northern region) and fast growth at prudent cost (from 25mn MT in FY18 to 37mn MT in FY22E at capex rate of below USD 70/MT). We value Dalmia at 12x FY21 consolidated EBITDA (implied EV of USD 138/MT). We recommend BUY on Dalmia Bharat with a TP of Rs 1,450 (12x FY21 consolidated EBITDA). In 4QFY19, Dalmia sustained its superior margin (EBITDA at Rs 1,092/MT, despite high energy costs and lower incentives YoY). The co also continued to pare off debt, despite large capex.

Steady volume growth with recovery in margins Dalmia Bharat Ltd (DBL) is the fourth largest cement company in India with a capacity of ~26.1MT, focusing in South with 13.2MT and East &...

Revenue grew by 17.5%YoY aided by healthy volume growth of 13.5% YoY. EBITDA de-grew by 11.7%YoY due to surge in raw material and power & fuel expenses, EBITDA margin declined by 600bps YoY to 18%. We reduce EBITDA margin by 200bps/60bps for FY19E/20E. Pet coke prices has declined to US$96 in October from US$103 in Q2FY19. The recent acquisition, Kalyanpur cement (1.1MT) started clinker production in Q2FY19 and grinding is likely to start from Q3FY19. DBL has completed the scheme of arrangement & amalgamation with OCL...

14 September 2018 Dalmia Bharat The Indian cement industry witnessed supply growing at a CAGR of 11% over FY07-17. However, the pace of capacity addition has declined over the years. Also, around this time, green-field capital costs were constantly increasing due to higher underlying prices of land. Green-field capital costs increased from USD100/t in 2012 to USD120/t in 2017 due to higher land prices and also due to a rise in overall lead time for the construction of projects. Cement prices over the last 17 years increased at a 5% CAGR and have shown negative growth only for three years, during FY07-17. Prices witnessed maximum growth in FY06-07 on account of consolidation in the industry when Ultratech acquired L&T; Cement and Holcim acquired ACC/Ambuja. Increase in prices of land Availability of credit turning more stringent The last few limestone bidsby Emami Cement, Dalmia Cement and Ambuja Cementpoint to a sharp increase in the cost of acquisition of limestone.

Revenue grew by 15%YoY aided by healthy volume growth of 13% YoY. EBITDA de-grew by 5.9%YoY due to surge in raw material, power & fuel and freight expenses. EBITDA margin declined by 490bps YoY to 22.1%. We reduce EBITDA margin by 270bps/330bps for FY19/20E to factor in fuel/RM cost increase while marginally change revenue estimates. DBL repaid Rs203cr in Q1FY19. Net Debt/EBITDA is at 1.7x Vs 2.3x YoY. Cost reduction measures like setting up of Waste Heat Recovery (WHR) and increased mix of alternate fuel (low cost) will support margins....

Revenue decreased by 9.75% to Rs. 2367.58 Cr in Q1FY19 when compared to the previous quarter. Dalmia Bharat Ltd Q1FY19 results Comment

Inline quarter; East expansion will be a key monitorable Dalmia Bharat (DBEL) reported 1QFY19 results In-line with expectation. DBEL reported revenue growth of 16% YoY, led by volume growth (13% YoY) on rising demand in key markets. Blended realisations grew by 3.7% on a sequential basis and was 2.5% higher YoY. Cement EBITDA/t at INR1,135/t declined 19% YoY as variable cost escalations more than offset the realisations improvement. Net debt at INR 34.28bn, declined by INR 850mn in 1Q. Subsequently net debt-to-EBITDA remained stable at 1.71x and cost of debt remained stable at 8% (8.3% in 1QFY18). Company's 7.8MTPA expansion in Eastern India is on track and...

Inline results; Next phase of growth from East Dalmia Bharat (DBEL) reported revenue growth of 21% YoY in 4QFY18, led by volume growth (14% YoY) on rising demand in key markets - East (+17% YoY), Northeast (+14% YoY), South (+14% YoY) and Maharashtra (+14% YoY). Realisations declined marginally on a sequential basis and was 3% higher YoY. EBITDA/t at INR1,137/t declined 6% YoY as cost escalations more than offset the realisations improvement. Net debt declined by INR4.4bn in 4QFY18 and net debt-to-EBITDA reduced to 1.72x from 2x QoQ with cost of debt declining to 8% (8.9% in 4QFY17). Company has embarked on its next phase of growth through...

Established in 1939, Dalmia Bharat Ltd. (DBL) has emerged as one of India's prominent cement companies over the past many decades.

Dalmia Bharat is in advanced stage of acquiring 2 companies under NCLT process Murli Industries (3 mnt in Maharashtra, Western region) and Kalyanpur Cements (1.1 mnt in Bihar, Eastern Region).

EBITDA/t declined 10% QoQ (-6% YoY) to INR1,095 in 3QFY18 due to higher other expenses and raw material costs ( an increase in slag prices by 62%YoY). Hence, EBITDA rose 10% YoY to INR4.5b (est. of INR 4.7b), with the margin at 21.7% (-2.3pp YoY, -2.3pp QoQ). Interest cost was lower by 33%YoY at INR1.42b due to a reversal of forex fluctuations and debt reduction by INR2.28b/INR7.37b in 3QFY18/9MFY18. Other income declined 25% YoY due to lower yield. With the tax rate at 32% (33% in 3QFY17), adj. PAT increased145% YoY to INR979m (est. of INR1.14b).

Dalmia Bharat's (DBL) Q2FY18 consolidated EBITDA was in line with our and consensus estimate at Rs 4.3 bn, up 5% YoY, mainly due to better volumes.

Net Sales stood at INR 18337 mn as against our estimates of INR 18150 mn; which was up by 7% y-o-y and down 10.4% q-o-q. Volumes for the quarter stood at 3.64 MT(est of 3.66 MT) which grew by 6.4% y-o-y. EBIDTA stood at INR 4414 mn which was up by 4.9% y-o-y and down 20.7% q-o-q and EBIDTA margin stood at 24.1% (est. of 23.4%) as...