Dalmia Bharat Q3 Results Review - Improvement In Volume Growth Necessary: Dolat Capital

Dolat Capital Report

Dalmia Bharat Ltd.'s reported beat on estimates, however realization and EBITDA/tn were in line.

Dalmia Bharat posted +7.3% YoY revenue to Rs 36.0 billion (plus 14.3% QoQ) led by plus 8.1% YoY in volume to 6.8mt (plus 10.8% QoQ), which was partially offset by -0.7% YoY in realization/tn to Rs 5,276 (plus 3.2% QoQ). Ebitda plus 20.3%/ plus 33.8% YoY to Rs 7.8 billion/ Rs 2.7 billion led by better operating performance.

We expect 12.6%/ 22.7%/ 34.2% revenue/ Ebitda/ APAT compound annual growth rate over FY23- 26E led by 9.6%/ 14.7%/ 14.1% volume growth and -0.8%/ 0.3%/ 0% realization growth in FY24E/ FY25E/ FY26E.

We decrease Ebitda estimates for FY24E/ FY25E factoring lower volume growth coupled with lower realization/tonne, however maintain FY26E. We maintain Accumulate with a revised target price of Rs 2,540 based on 12 times FY26E.

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