Dalmia Bharat, a leading cement manufacturer, has shared its growth plans and demand trends. The company sees weakness in key eastern states but positive trends in other regions. With a strong period ahead, the management expects volumes to grow in line with the industry.
Demand Trends and Pricing
The company noted that demand in the South remains stable, and non-trade demand in the North-East is strong. However, attempts to hike prices in the eastern region did not succeed due to muted demand. Pricing actions will now depend on demand intensity.
Growth Plans and Cost Reduction
Dalmia Bharat is confident about its medium-term volume growth trajectory, aided by ongoing capacity addition plans. The company aims to reach its FY28 goal of ~70mtpa. It also maintained its cost reduction target of Rs150-200/t by FY28E, to be achieved through cost-saving initiatives and fuel-mix optimization.
Investment Outlook
The stock is trading at 10.6x/9.3x EV of FY27/FY28E EBITDA. With a revised target price of Rs2,263, the company's stock is a potential accumulation opportunity. Investors should consider the company's growth plans and demand trends when making investment decisions.
- EBITDA estimates have been cut by 6%/5%/2% for FY26/27/28E
- Expected EBITDA CAGR of ~21% over FY25-28E
- Stock is trading at 10.6x/9.3x EV of FY27/FY28E EBITDA
Remember, this is a perspective, not a prediction. Do your own research before making any investment decisions.