Time period given by analyst is one year when Dalmia Bharat Ltd. price can reach defined target. Dalmia Bharat Ltd., incorporated in the year 2013, is a Mid Cap company (having a market cap of Rs 35929.37 Crore) operating in Cement sector.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 2615.00 Crore, down -21.26 % from last quarter Total Income of Rs 3321.00 Crore and up 28.88 % from last year same quarter Total Income of Rs 2029.00 Crore. Company reported net profit after tax of Rs 238.00 Crore in latest quarter.
Investment Rationale
Dalmia Bharat’s (DALBHARA) Q1FY22 EBITDA at Rs7.0bn (up 14% YoY) was lower than estimates due to lower volumes. Volume decline was higher at 24% QoQ and management attributed market share loss to temporary shutdown of grinding unit due to covid resurgence and change in marketing plan. While realisation increased 8% QoQ (2% YoY), total cost/te also rose 4% QoQ (10% YoY) resulting in 20% QoQ increase in EBITDA/te to Rs1,431/te (down 15% YoY). Company unveiled its capital allocation plan wherein it is targeting aggressive 14-15% CAGR capacity creation over the next decade and ~60% increase over next three years to 48.5mnte by FY24E. Factoring-in the Q1FY22 miss, the brokerage cuts FY22E-FY23E EBITDA by 4-8%. However, with increasing scale / volume visibility and profitability, the brokerage raises target EV/E to 11x (earlier: 10x) and raise the target price to Rs2,100/sh (earlier: Rs2,075) based on 11x Jun’23E EV/E. Key risk: lower demand / pricing.
Promoter/FII Holdings
Promoters held 56 per cent stake in the company as of June 30, 2021, while FIIs held 14.2 per cent, DIIs 4.2 per cent and public and others 25.6 per cent.
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