Dalmia Bharat Ltd.(Old) share price target

(-13% QoQ) to INR1,213 in 2QFY18, as higher realization was offset by cost push. Unitary cost/t increased 1% YoY due to higher power & fuel and raw material cost (higher prices of slag), partially offset by lower other expenses (-22% YoY). Hence, EBITDA rose 5% YoY to INR4.41b. Interest cost declined 14% YoY, as debt was reduced by INR5.1b in 1HFY18. PAT increased by 3.4x to INR1.06b, as the tax rate was lower at 31% in 2QFY18 v/s 59% in 2QFY17. Concall highlights: (a) Petcoke consumption rate was at USD85/t for 2QFY18 v/s spot prices of USD105/t. (b) Kiln productivity increased by 9% in...

India's cement demand & supply gap is likely to narrow due to enhanced government spending in housing & infra and slowdown in new capacities. DBL has expanded its capacity by 20 times within a decade to 25MT. Now the focus is on asset sweating and deleveraging. DBL has increased its market share from 8% in FY14 to 11% in FY17, its volume has grown at 23.2% CAGR Vs 4.1% of industry over last 5 years. The capacity utilisation has stabilized to 61% in FY17, it is anticipated to increase to 64% and 71% by FY18E and FY19E respectively....

Dalmia Bharats Q1FY18 consolidated EBITDA at Rs 5.6 bn was higher than our estimate of Rs 5.1 bn mainly due to strong cement realization.

Revenue fell by 5.77% to Rs. 2058.87 Cr in Q1FY18 when compared to the previous quarter. Revenue fell by 5.77% to Rs. 2058.87 Cr in Q1FY18 when compared to the previous quarter.

Revenue increased by 25.63% to Rs. 2185.04 Cr in Q4FY17 when compared to the previous quarter.

Volume and realization: Cement volume was 4.6 mnt, up 17% YoY. This was due to strong cement demand in South and North East regions and ramp-up of production in new Belgaum plant. Average realization decreased by Rs 80/ton QoQ to Rs 4,800/ton.

Dalmia Bharat (DBL) stock has rerated over the last 3 years due to cost reduction and expansion, but a further rerating is expected due to rising capacity utilization and balance sheet deleveraging.

Dalmia Bharat's Q3FY17 consolidated EBITDA at Rs 4.2 bn was above consensus and our estimates. The beat was largely due to higher volumes. Cement volume was 3.6 mnt, up 20% YoY vs. street and our expectation of 8% rise. This was due to strong cement demand in South region during the quarter.

Dalmia Bharat Ltd. (DBL) reported 16.6% YoY growth in net revenue to INR 1,725 cr on back of robust growth in cement sales volume in its Q3FY17.

Dalmia Bharat's Q3FY17 revenue of Rs 17.4 bn (+17% YoY) came better than estimate of Rs 16.2 bn, led by better than expected cement volumes (led by better demand in South India & increase in sale of premium product). EBITDA/ton of Rs 1183/t (flat YoY) was broadly in-line with our estimate as the better cost control was offset by weakness in pricing. EBITDA increased 19% YoY to Rs 4.2 bn (15% higher than estimate). Consolidated PAT increased significantly by 19% YoY to Rs 357 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 16% and PAT CAGR of 63% during FY16E-19E.