Dalmia Bharat Ltd.(Old) share price target

With the incremental capacity addition in the North East, the company is expected to witness substantial boost in profitability.

Dalmia Bharat (DBL) is India?s 3rd largest cement group. DBL is well positioned to ride the tide of infrastructure & housing boost. Stock price provides a good upside for investors.

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.

9 Dalmia Bharat has continued to deliver robust operating performance in Q1 and continuestobeatconsensusby12%/largelyinlinewithourestimatesonEBITDAfront. ThoughitbeatsusonEBITDA/tonneestimateby4%. 9 Dalmia Bharat continues to beat consensus consistently for the past many quarters now.Givencementpricesupportreturns,earningsupgradecannotberuledout....

9 Dalmia Bharat has once again delivered robust operating performance and beat consensus/ourQ4estimatesby30%/35%. 9 Focusoncostefficiencieshascontinuedandwehaveseenthesedeliveredinallmajor...

Strong show on volume front as South gains momentum: Dalmia Bharat's (DBEL) cement volume grew by 66% YoY (+31% QoQ) to 3.88mt (vs. our estimate of 3.46mt) in 4QFY16, led by a strong demand from the individual...

Dalmia Bharat (DBL) has proposed the amalgamation of Adhunik into DCBL and Bokaro & OCL into Odisha Cement (100% subsidiary of OCL). Power assets of 99 MW under DCBPVL (74% subsidiary of Dalmia Power) will also get merged into DCBL. This proposal will further simplify the corporate structure (post the first step taken in Jan-15, regarding partial exit provided to KKR) bode well for DBL and would help in some synergy benefits from raw material & logistics. Maintain Buy with TP of Rs 924.

Northeast operations have stabilised. Announcement of commercial production at Calcomisexpectedshortly.Belgaumrampupwillbeinlinewithdemandgrowth. DCBL's capacity has increased by 1.1mn tonnes p.a. (total installed capacity is ~25mn...

Dalmia Bharat (DBL) has announced that it will acquire 15% stake in its subsidiary, Dalmia Cement Bharat Ltd (DCBL), from KKR. This will make DCBL a fully owned subsidiary of DBL. We believe that the transaction will simplify the corporate structure at a reasonable valuation (~US$90/t implied).

disappointed with the numbers. It has continued to deliver excellent cost efficiencies and remains committed to asset sweating and improving operational efficiencies, which it deliveredacrossallparameters.Petcokeconsumptionimprovedto67%(29%yoy),power...