As Dalmia Bharat is out of the JPA’s acquisition race, its earlier capacity target of 75 million metric tonne by FY28E would get pushed by one-two years, which is not negative, in the brokerage's view. Dalmia’s current capacity and ongoing expansion is sufficient to help Dalmia deliver 7% volume CAGR.
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HDFC Securities Institutional Equities
We maintain our 'Buy' rating on Dalmia Bharat Ltd. with a revised target price of Rs 2,420/share (12x its Sep-27E consolidated Ebitda). We estimate Dalmia’s volume growth will firm up H2 FY26 onwards, riding on demand uptick and expansion ramp-up, leading to a 7% volume CAGR during FY25-28E.
Dalmia is also working on various cost levers which can more than offset the impact of reduction in GST incentive accrual and higher royalty (on limestone mining in Tamil Nadu).
In our view, these factors—combined with the increase in cement prices across Dalmia’s key markets during H1 FY26 and the continued ramp-up of its high-margin north-east sales—are expected to boost margins to Rs 1,196 per MT in FY28E, up from Rs 820/1,136 per MT in FY25/H1 FY26.
We estimate Dalmia’s net debt to Ebitda ratio to remain well under 2x as it executes 12 mnmt organic expansions in the southern region by FY28E.
With Dalmia out of the JPA’s acquisition race, it will accelerate its other expansion plans, including a greenfield integrated plant in Rajasthan.
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