Accumulate Dalmia Bharat, target price Rs 1827: Prabhudas Lilladher

Prabhudas Lilladher has accumulate call on Dalmia Bharat with a target price of Rs 1827. The current market price of Dalmia Bharat is Rs 1521.1. Time period given by analyst is one year when Dalmia Bharat price can reach defined target.

Dalmia Bharat, incorporated in the year 2013, is a mid cap company (having a market cap of Rs 28786.39 crore) operating in cement sector.

It's key products/revenue segments include income From management services for the year ended March 31, 2022.

Financials
For the quarter ended June 30, 2022, the company reported a consolidated total income of Rs 3324.00 crore, down 3.18 per cent from last quarter total income of Rs 3433.00 crore and up 27.11 per cent from last year same quarter total income of Rs 2615.00 crore. Company has reported net profit after tax of Rs 188.00 crore in latest quarter.

The company’s top management includes Mr.Pradip Kumar Khaitan, Mr.Puneet Yadu Dalmia, Mr.Gautam Dalmia, Dr.Niddodi Subrao Rajan, Mr.Yadu Hari Dalmia, Mrs.Sudha Pillai, Mr.Virendra Singh Jain. Company has Walker Chandiok & Co. LLP as its auditors. As on 30-06-2022, the company has a total of 19 Crore shares outstanding.

Investment Rationale
1) Expanded clinker/cement capacity by 2mnt/1.1mntduring the quarter with capacity post expansion increased to20.9mnt/37.0mnt

2) On track to increase clinker/cement capacity by13%/32% 23.7mnt/49.0mnt by end of FY24e 3) Guided for capex of Rs30-35bn/Rs35-40bn in FY23e/FY24e; Spent Rs5.25bn on capex in Q1FY23

4) Coal cost increased 22% QoQ to US$220/t in Q1FY23

5) On calorificbasis, coal cost increased 19% QoQ to Rs2.47/1000 kcal

6) Leaddistance reduced marginally by 2% QoQ to 311kms

7) Mix of volumes totrade segment increased by 300bps QoQ to 68%

8) Blended cement’sshare increased 400bps QoQ to 82%

9) Accrued/Received GSTincentives of Rs580mn/Rs440mn in the quarter

10) Expects to accrueincentives of Rs2.4bn for FY23 and FY24 each including Murli plant

11)Incentive receivables stand at Rs6.8bn

12) Gross debt declined 4% QoQto Rs30.1bn; Net cash fell 87% QoQ to Rs1.9bn due to 29% fall in MTMvalue of 14.8% stake in IEX

Promoter/FII Holdings
Promoters held 55.9 per cent stake in the company as of June 30, 2022, while FIIs owned 14.01 per cent, DIIs 5.84 per cent.