Dalmia Bharat Shares Gain As Analysts Raise Target Price On Q2 Beat

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.