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Angel Broking has buy call on with a target price of Rs 2650. The current market price of Dalmia Bharat Ltd. is Rs 2049.7. Time period given by analyst is one year when Dalmia Bharat price can reach defined target.

Dalmia Bharat Ltd., incorporated in the year 2013, is a Mid Cap company (having a market cap of Rs 37977.37 Crore) operating in Cement sector.

For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 2615.00 Crore, down -21.26 % from last quarter Total Income of Rs 3321.00 Crore and up 28.88 % from last year same quarter Total Income of Rs 2029.00 Crore. Company reported net profit after tax of Rs 238.00 Crore in latest quarter.

Investment Rationale
Dalmia Bharat (DBL) is among the top four cement manufacturers in the country, with an installed capacity of 30.75 MTPA (48% in the southern region and 52% in the eastern region) as on FY21. DBL is play on ramp-up in volumes owing to its new capacities in East and West.DBL has added ~4.2MTPA capacity in FY21 and is in midst of adding ~8MTPA (~5.4MTPA in FY22E and ~2.6MTPA in FY23E, mostly in East & Murli) which would drive the volume growth in the near future. This augurs well owing to strong region-specific fundamentals. The brokerage expects the demand environment to remain strong given the impetus on infrastructure spend. It expects cement volume CAGR of ~15% over FY21-23E on the back of strong demand and capacity absorption.The price hikes taken by DBL would enable it to manage cost pressures while continued free cash generation is likely to aid deleveraging. Considering the strong growth outlook, it believes that DBL deserves to trade at a premium to replacement cost as seen during previous growth spurts.

Promoter/FII Holdings
Promoters held 56 per cent stake in the company as of June 30, 2021, while FIIs held 14.2 per cent, DIIs 4.2 per cent and public and others 25.6 per cent.

(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.


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