In a recent note following its interaction with the company’s management, the brokerage said it is valuing the cement major at 11x forward EV/EBITDA. It expects the company to benefit significantly from improved pricing in South and East India, despite some near-term volume pressures due to the monsoon.
While demand has softened in the East and is gradually weakening in the South due to seasonal factors and flooding, cement prices have held strong. “Even after the price pullback in June, prices remain ₹10–15 per bag higher than Q4FY25 averages,” the note said. Compared to Q4FY25, average prices have risen by ₹12 per bag in the East and ₹35 per bag in the South.
This robust pricing environment, along with flattish input costs, is expected to lift EBITDA per tonne by ₹200–250 sequentially, providing a boost to near-term operating performance.
Longer-term, the brokerage highlighted Dalmia Bharat’s plans to cut costs by ₹150–200 per tonne by FY27. These savings will be driven by a higher share of renewable energy and reductions in logistics costs, according to the management.
On the capacity front, Dalmia Bharat has already announced a 6 million tonne expansion in Belgaum and Pune with a capex of ₹3,500 crore. Upon completion by end-FY27, this will take the company’s total installed capacity to 55.5 million tonnes.
Shares of Dalmia Bharat rose 4.66% on Thursday, closing at ₹2,191.80. The stock has delivered returns of 26% over the past six months, and the company currently has a market capitalisation of ₹41,110 crore.
(Edited by : Ajay Vaishnav)
