Shares of Dalmia Bharat Ltd. gained as analysts raised target price after second-quarter profit beat estimates.
"Broadly in-line results, continued volume market share gains, and management commentary on growth continues to be bullish," Morgan Stanley said in a research note.
Dalmia Bharat Q2 Results: Key Highlights (YoY)
Revenue up 15% at Rs 2,971 crore
Ebitda down 40% at Rs 377 crore
Profit after tax down 76% at Rs 47 crore
The stock rose 3.53% to trade at Rs 1,712.05 as of 11:10 am while the benchmark Nifty 50 declined 0.10% on the NSE. Total traded quantity is 4.1 times the 30-day average.
Of the 32 analysts tracking the company, 26 maintain a 'buy', four suggest a 'hold' and two recommend a 'sell', according to Bloomberg data. The 12-month consensus price target implies an upside of 12%.
Brokerages' take on Dalmia Bharat's quarterly results:
Jefferies
Keeps ‘buy' call on the stock and raises price target to Rs 1,900 from Rs 1,825, implying a potential upside of 19%.
Volume growth of 13% year-on-year was higher than industry.
Costs are likely to drop a bit in Q3 as energy cost eases.
Recent pricing strength in eastern and southern India is another positive.
Dalmia announced its target to expand to 70-75mtpa by FY27 after expanding it to 49mtpa by FY24.
Maintains EBITDA estimates.
Morgan Stanley
Keeps 'overweight' call on the stock and raises price target to Rs 1,900 from Rs 1,850. This implies a potential upside of 19%.
Dalmia's strong presence in the eastern region keeps its well positioned to take advantage of growth opportunities in the region.
Valuations are attractive.
Believes the stock should do well, with improving profitability.
Cuts FY23 Ebitda estimates by 9% to factor in high fuel costs assumption.
FY24, FY25 estimates largely unchanged.
Finds medium-term demand visibility impact despite near-term uncertainties.
Expect a margin recovery from here on.
Axis Capital
Maintains 'Add' and reduces target price to Rs 1,795 from Rs 1,825. This implies a potential upside of 9%.
Market share to sustain in East but margin to remain subdued.
Expect pricing to remain subdued.
Flags lower pricing as key risk.
Raises FY23 Ebitda by 5% due to stronger volumes.
Estimates 12% CAGR in Ebitda over FY22-25 driven by 11% CAGR in volume.
Cuts FY24-25 Ebitda by 1-2% to factor in sticky costs.
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