Dalmia Bharat climbs 3% in trade; PL Capital raises target, sees 16% upside

Business Standard

9 hours ago

Dalmia Bharat shares climbed 3.4 per cent in trade on Thursday, logging an intraday high at ₹2,166.9 per share on BSE. At 12:27 PM, Dalmia Bharat price was trading 3.26 per cent higher at ₹2,162.6 per share on the BSE. In comparison, the BSE Sensex was up 0.64 per cent at 83,284.9.
The company's market capitalisation stood at ₹40,519.7 crore. Its 52-week high was at ₹2,186.6 per share and 52-week low was at ₹1,602 per share.
In one year, Dalmia Bharat shares have gained 15 per cent as compared to Sensex's rise of 5 per cent.
PL Capital has upgraded its target price on Dalmia Bharat to ₹2,273 per share from ₹2,117 with an 'Accumulate' rating. The brokerage sees 16 per cent upside in the stock from previous close at ₹2,094.35 per share, for the following reasons:
Company well-positioned to benefit from cement price hikes
The brokerage believes Dalmia Bharat is well-positioned to benefit from cement price increases in the south and east regions of India as it has significant capacities in both the South (17mtpa) and East (21.6mtpa) regions. The company is expected to be a key beneficiary of higher prices in these regions, particularly during the first half of FY26. The company's management is expecting demand to improve post-monsoon and the industry to grow at 7-8 per cent in FY26.
Taking the overall picture into consideration, PL Capital noted that cement prices in the country's east region improved in April/May along with other regions by ₹20 per bag and got cut by ₹5 in June due to early monsoon. However, the current prices are still ₹10-15 higher than the Q4FY25 average.
Even though the southern region's demand is better than the east, it is now affected by early monsoon and flood-like situations in a few regions. Prices have improved by ₹50 per bag in April/May and rolled back by ₹5-10 due to monsoon-led weakness in demand.
Capacity expansion
Dalmia Bharat has announced 6 mtpa expansion projects in Belgaum and Pune, which are expected to be completed by the end of FY27E, raising its capacity to 55.5mtpa. The company also has plans for two additional 6 mtpa projects via the Greenfield and Brownfield routes, set to drive future growth.
Dalmia Bharat remains one of the lowest-cost cement producers, driven by its optimal mix, according to PL Capital. The company is confident in achieving cost savings of ₹150-200 per tonne by FY27E, with half of these savings expected to materialise in FY26E. Key cost-saving strategies include increasing the share of renewable energy from 36 per cent to 45-50 per cent by the end of FY26 and reducing logistics costs by improving truck utilisation and using a more dedicated fleet for loading and unloading.