Motilal Oswal has given Buy recommendation for Dalmia Bharat recommended buy rating on the stock with a target price of Rs 2000 in its research with a target price of Rs. 2000 in its research report issued on Apr 18, 2022
Motilal Oswal’s research report on Dalmia Bharat
DALBHARA is a dominant player in East India with a clinker/grinding capacity share of 18%/17%. The company will be a beneficiary of: 1) improved consolidation in the region, which should aid an improvement in Cement prices and 2) recent increase in Cement prices in East India. The management has set yet another aggressive capacity addition target to emerge a pan-India player and achieve a grinding capacity of 110-130mtpa by CY31 (at a 14-15% CAGR). In the first phase, it will expand its capacities to 48.5mtpa from 35.9mtpa at present. DALBHARA is a long-term play, backed by: a) robust growth plans, along with diversification in its market presence; b) locational advantages in East India (having clinker facilities in Odisha and Bihar), and c) its commitment to ESG, which will aid cost reductions. We expect DALBHARA to clock a revenue/EBITDA/PAT CAGR of 11%/18%/21% over FY22-24. Its net debt/EBITDA ratio is estimated to stay below 1x by FY24.
We value DALBHARA at 12.5x FY24E EV/EBITDA to arrive at our TP of INR2,000, an upside of 25% from current levels. We maintain our Buy rating on the stock.
At 14:11 hrs Dalmia Bharat was quoting at Rs 1,605.55, up Rs 4.30, or 0.27 percent.
It has touched an intraday high of Rs 1,621.50 and an intraday low of Rs 1,602.50.
It was trading with volumes of 2,157 shares, compared to its thirty day average of 14,611 shares, a decrease of -85.24 percent.
In the previous trading session, the share closed down 1.72 percent or Rs 28.10 at Rs 1,601.25.
The share touched its 52-week high Rs 2,547.20 and 52-week low Rs 1,279.45 on 14 September, 2021 and 08 March, 2022, respectively.
Currently, it is trading 36.97 percent below its 52-week high and 25.49 percent above its 52-week low.
Market capitalisation stands at Rs 30,082.98 crore.