Target: ₹2,180

CMP: ₹1,700.60

Dalmia Bharat Ltd (DBL) has announced capacity expansion plan of 6 MTPA Grinding and 3.6 MTPA Clinker unit costing Rs 3,520 Cr to be met out of internal accrual and debt. The company will establish a 3.6 MnTPA clinker unit and a 3 MTPA grinding unit at its existing Belgaum plant, Karnataka. And a new greenfield split grinding unit with a capacity of 3 MTPA in Pune, Maharashtra.

We remain positive on the growth prospects of the company and expect the company to achieve a Volume/Revenue/EBITDA/PAT CAGR of 9/11/22/47 per cent over FY25-FY27E. This growth will be driven by capacity expansion, market share gains, operational efficiencies. Additionally with the growing pace of consolidation and capacity expansion by top players, their overall market share is set to increase further to 65-70 per cent by FY27-28. This trend will positively influence cement pricing, economies of scale, and supply chain efficiency.

The company, being among the top 5 players in the country, is well-positioned to benefit from this consolidation in the medium to long term.

The stock is currently trading at 11x/10x FY26E/FY27E EV/EBITDA and EV/tonne of $80 & $77 and with the recent correction in stock price, valuations have turned attractive. We maintain our Buy rating with a target price