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 &...
Dalmia Bharat Enterprises (DBEL) which has been re-named and re-listed from Odisha Cement earlier, reported a steady 4QFY19 operating performance, (better than expectation). Volume growth was ~7% YoY at 5.57mnmt (above our estimate of 5.43mnmt). Though grey cement realisation (unadjusted to incentive income) declined ~2.0% YoY to Rs4,743/tn cost inflation was flat at Rs3,937/tn. EBITDA increased 10.0% YoY to Rs6.5bn. Overall revenues grew ~8% YoY to ~Rs28.4bn. Operating cost control came largely because of savings in other expenditure and logistic costs, but higher raw material costs largely offset the benefits. Effectively, EBITDA/tn remained flat (marginal fall of 1.5%YoY) at Rs1,117 compared with Rs1,133 in 4QFY18. Following...
Weak Operating Performance As Expected; Stock Under Review Dalmia Bharat Enterprises (DBEL), renamed and listed as Odisha Cement, reported a 3QFY19 weak operating performance, in line with expectations. Volume growth was ~8% YoY at 4.47mnmt (below our estimate of 4.65mnmt). Grey cement realisation (unadjusted to incentive income) declined ~2.4% YoY to Rs4,866/tn and cost inflation was ~3.3% YoY at Rs4,016/tn which pulled EBITDA down by 16.5% YoY to Rs3.8bn. Overall revenues grew ~just over 5% YoY to ~Rs21.8bn. Operating costs were high because of overall inflated cost structure contributed by energy & logistic costs, higher raw material costs and other...
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...
Performance In Line; Stock Under Review Post Odisha Cement Amalgamation Dalmia Bharat Enterprises (DBEL) reported 2QFY19 performance in line with expectation backed by YoY double-digit volume growth. Volume grew ~13.5% YoY to 4.13mnmt (in line with our estimate of 4.08mnmt), contributed by its key markets. Realisation gains (unadjusted to incentive income), grew ~6% YoY to Rs5,225/tn which was offset by higher- than-estimated cost over-run of ~12% at Rs4,283/tn. Overall revenues grew ~17% YoY to ~Rs21.6bn. Higher operating costs was because of higher energy costs (combined with raw material costs to neutralise the inventory...
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....
Dalmia Bharat Enterprises (DBEL) reported a steady performance in 1QFY19 backed by YoY double-digit volume growth. Volume grew ~13% YoY to 4.51mnmt (below our estimate 4.67mnmt), contributed by its key markets. Realisation, however, fell ~4.8% YoY/flat QoQ to Rs4,881/tn on account of weak pricing in the southern/eastern region. Overall revenues grew ~16% YoY to ~Rs23.7bn. Additionally, operating costs increased ~10% YoY to Rs4,088/tn (5% above our estimate) contributed by higher raw material and energy costs, and also other expenses. Effectively, EBITDA declined ~6% YoY to Rs5.24bn versus ~Rs5.6bn in 1QFY18 (above our estimate of ~Rs4.9bn). EBITDA/tn stood flat at Rs1,135 versus Rs1,333 as cost inflation and weak...
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...
Dalmia Bharat Enterprises (DBEL) reported a healthy performance for 4QFY18 on double-digit volume growth YoY driven by higher volume. Volume grew ~14% YoY to 5.18mnmt (above our estimate of 4.96mnmt), mainly contributed by the eastern region. Realisation was up ~4% YoY/down 1% QoQ to Rs4,892/tn (marginally below our estimate of Rs4,915/tn) on account of better pricing in the eastern region. Overall revenues grew ~21% YoY to ~Rs 26.4bn. Operating costs increased ~10% YoY to Rs3,956/tn (marginally below our estimate of Rs4,000/tn) because of high raw material, energy, logistics and employee costs. Effectively, EBITDA grew ~7% YoY to Rs5.9bn...
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...
