Dalmia Bharat has seen a re-rating since the start of this financial year. The cement maker gained 127 percent since April, compared to gains of between 13 percent and 39 percent for the top four cement companies – Ultratech Cement, Shree Cements, Ambuja Cements and ACC.
Dalmia Bharat's sharp run-up has been triggered by its financial performance in the first quarter. The company clocked 22 percent volume growth and 77 percent profit growth in April to June quarter. The company's operating margin expanded 400 basis points, while its earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne of Rs 1,300 was the best in the industry.
Dalmia Bharat is also the most preferred stock in the cement sector, with 79 percent of analysts tracked by Bloomberg giving it a buy rating. The stock currently trades at a premium to the Bloomberg consensus price target of Rs 1,536 per share.
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