Motilal Oswal has given Buy recommendation for Dalmia Bharat recommended buy rating on the stock with a target price of Rs 1915 in its researc with a target price of Rs. 1915 in its research report issued on May 10, 2022
Motilal Oswal’s research report on Dalmia Bharat
Dalmia Bharat (DALBHARA)’s 4QFY22 performance was above our estimates primarily driven by better realization (4% above estimates). EBITDA was at INR6.8b v/s estimated INR5.3b and OPM was at 20.2% v/s estimated 16.8%. However, higher costs (up 10% YoY) continued to impair margins (OPM dipped 4.2pp YoY and EBITDA/t was down 13% YoY). We cut our FY23E/ 24E EBITDA by 2%/4% considerindg higher energy costs. This along with likely higher interest expenses leads to our EPS reduction of 11%/4% in FY23E/24E, respectively. We like the stock owing to its growth plans, locational advantage in East India and cost reduction measures.
We maintain our BUY rating with a TP of INR1,915 (v/s INR2,000 earlier), based on 12x FY24E EV/EBITDA.