HDFC Securities Remains Bullish On This Cement Stock — Key Triggers And Targets Inside

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HDFC Securities Institutiional Equities

HDFC Securities has maintained its Buy rating on Dalmia Bharat Ltd., keeping the target price unchanged at Rs 2,470 per share, valuing the cement major at 12x FY28E consolidated Ebitda.

Following interactions with Dalmia Bharat's management, the brokerage noted that industry sentiment remains upbeat heading into Q4 FY26, with expectations of 7%+ YoY demand growth across the sector. The company expects to match the industry growth trajectory for the quarter.

On the pricing front, cement prices have recovered by ~1.5–2% QoQ across the company's key operating markets, offering some respite after a period of softness. HDFC Securities highlighted that the impact of higher pet coke prices is likely to be felt only from Q1 FY27 onwards, providing near‑term margin support for producers.

For Dalmia Bharat, the brokerage forecasts a notable margin improvement in Q4 FY26, aided by the price uptick and operating leverage gains. It expects the company's margins to come in around Rs 970 per tonne, compared to Rs 822/Rs 926 per tonne on a QoQ/YoY basis.

Management reiterated its cost‑reduction roadmap, affirming it remains on track to lower operating expenses by Rs 150–200 per tonne during FY26–28E through multiple efficiency initiatives. Meanwhile, its ongoing capacity expansions in the southern and western regions are progressing as planned.

HDFC Securities projects Dalmia Bharat to deliver 7% volume CAGR and 20% Ebitda CAGR between FY25 and FY28. Despite an estimated Rs 115 billion capex over FY26–28E, the brokerage believes the company's balance sheet will remain healthy, with net debt-to-Ebitda expected to stay below 2x.

Overall, HDFC Securities remains positive on Dalmia Bharat's growth visibility, cost‑optimization roadmap, and improving industry demand environment.

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