Heidelberg Cement has built a strong retail franchise in the lucrative Central region and is trying to improve its operating efficiencies. As per Q4 FY25 call, the company has acquired a new mine in Madhya Pradesh and is currently undertaking a study for expansion; the site is yet to be identified.
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Dolat Capital Report
Heidelberg Cement India Ltd.’s Q2 FY26 results were broadly in line, however, adjusted profit after tax came below our estimates.
We expect revenue/Ebitda/APAT CAGR of 6.5%/20.1%/32.0% over FY25-28E, led by 7.5%/5.0%/5.0% volume growth and 1.0%/1.0%/0% realization growth in FY26E/FY27E/FY28E.
We maintain our FY26E/FY27E Ebitda estimates and introduce FY28E.
Anticipating subdued volume growth without any major expansion plans over FY25-28E, we maintain our ‘Sell’ rating with revised target price of Rs 165 (7.0x FY28E EV/Ebitda + 50% FY28E capital work-in-progress).
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Also Read: Shree Cement Q2 Review — IDBI Capital Maintains 'Buy', Revises Target Price; Sees 25% Upside
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