Accumulate Dalmia Bharat; target of Rs 2372: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dalmia Bharat

Dalmia Bharat (DALBHARA) reported inline operating performance in Q2FY26 on weak pricing and tepid volume scenario. Average NSR declined 4.7% QoQ due to lower premium share and pricing pressure to maintain market share in key regions. Volumes grew just 2.7% YoY due to intense monsoon in key regions. P&F costs declined led by increase in RE power capacity to 48% in Q2 vs 41% in Q1, along with that Freight costs and other costs also declined which led EBITDA/t increase by 56% to Rs1,009 (Ple of Rs1,014). DALBHARA reiterated its confidence in achieving cost savings of Rs150–200/t by end FY27E, though mineral bearing tax bill by TN govt. would keep the RM costs up. Capex execution is progressing well, with trial runs underway at the 3.6mt clinker line in Umrangso and 52% of civil work completed at Belgaum IU.

Outlook

We cut our FY27/28E EBITDA by 3% each due to loss of market share and incremental pricing pressure in key regions. At CMP, the stock is trading at 11x/10x EV of FY26/FY27E EBITDA. Maintain Accumulate with TP of Rs2,372 valuing at 11x EV of Sep’27E EBITDA.

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Dalmia Bharat - 20102025 - prabhu