Brokerages bullish on this cement stock, expect shares to gain up to 21%

IPO Price

Brokerages such as Emkay Global, Motilal Oswal, Axis Securities, and Sharekhan have renewed their “buy” recommendations for Dalmia Bharat Ltd., citing the company’s excellent potential for growth driven by capacity increases. Their target prices for the stock range from 1,750 to 2,260, suggesting an increase of up to 21% from the levels of the current market. On Monday, Dalmia Bharat’s stock price reached 1,858.90. On Tuesday, the stock price was 1.73 percent down at $1,836.95 per share.

What the brokerages have to say is as follows:

Exit Axis Securities

The plan of Dalmia Bharat to leave non-core businesses and investments is still in place. According to this plan, it has a legally binding contract in place to sell Dalmia Bharat Refractories Limited’s whole investment of 1,87,23,743 equity shares worth $10 each (42.36% of the company’s share capital) for the sum of Rs. 800 crore.

Demand for cement is still strong, and the brokerage anticipates it to increase at a CAGR of 7% to 8% from FY22 to FY25E. Together with strong real estate demand, rising government spending on infrastructure and housing continues to be the main development engine.

The stock is currently trading at a favourable EV/tonne of $90 and $87, respectively, and at 10 times FY24E and 9 times FY25E EV/EBITDA.

The firm keeps a “Buy” recommendation on the stock and values it at 11 times FY25E EV/EBITDA to arrive at a target price of $2,260 per share, up from the previous target price of $2,120 per share, indicating a 20% increase.

Mr. Oswal Motilal

In comparison to an earlier estimate of net debt of 2.4 billion, the brokerage expects the company’s net cash in FY24, including investments in IEX, to be at 4.1 billion. As a result, EPS will increase to 47.6 from 47.1 in FY24E. Dalmia Bharat is valued by Motilal Oswal at 12.5 times September 24E EV/EBITDA, up from the previous target price of 2,120. It stated, “Reiterate our Buy rating on the stock.”


The board of Dalmia Bharat has given its approval for the company to sell Sarvapriya Healthcare Solutions Private Ltd. its full 42.36 percent ownership in Dalmia Bharat Refractories (DBRL) for $8 billion. The aforementioned transaction is mainly consistent with the company’s objective of turning Dalmia into a pure-play cement company and getting rid of its non-core businesses and interests. The firm has a “Hold” call with a 1,750 target price on the stock.

BNP Paribas Sharekhan

Dalmia is still committed to combining growth with the maintenance of its balance sheet health by sticking to its promise to sell non-core assets. With a goal net debt to EBITDA ratio below 2, the company is still committed to increasing its capacity at a 14–15% CAGR over the next ten years to achieve 110–130 mtpa capacity by 2031.

The company’s long-term goal is to operate as a pure play cement company with a strong presence in every market across all of India.

With a 17% CAGR in net earnings over the period of FY2023E-FY2025E, Dalmia is now trading at an EV/EBITDA ratio of 12 times/11 times its FY2024E/FY2025E earnings, which, in our opinion, leaves potential for further upside. As a result, the brokerage has kept its ‘Buy’ rating and 2,250 as its price objective.

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