Dalmia Bharat
Value: south/east capacity at half the EV/t
- Last close
- ₹1,637.40
- 29 Sept 2026 · reference
- 1D · 1M
- −0.9% · −11.3%
- price-only
- Weight
- 2.4%
- 31 Jul 2026 · Aug rank 18
- Thesis review
- 8 Sep 2026
- Why We Own, p51
Approved description
India's fourth-largest cement group by capacity with 54.7 mtpa at Jun-2026 (after adding 5.2 mtpa of Jaiprakash/JP central-India assets at Chunar, Rewa and Sadwa for Rs 2,850 cr), historically concentrated in the South and East (Tamil Nadu, Andhra/Telangana, Odisha, West Bengal, Bihar, North-East) and now expanding into Central and West India. Sells ~30 mt a year (Q1FY27 volume 7.6 mt) with a 25% premium-product mix in trade; targets ~67 mtpa by FY28 and 110-130 mtpa by FY31.
- 01Cheapest replacement-cost play among large-caps: market cap of ~Rs 32,000 cr plus net debt of Rs 4,431 cr gives an EV of ~Rs 36,500 cr on 54.7 mtpa, i.e. ~Rs 670 cr (~$78) per mtpa, versus the ~$100+/t cost of new greenfield capacity and the Rs 548/t (~Rs 2,850 cr for 5.2 mtpa) Dalmia itself paid for the JP assets (management: near replacement cost).
- 02Capacity growth of ~22% to 66.7 mtpa by FY28 is largely funded and under construction: Belgaum 3 mtpa 78% complete (Q4FY27), Kadapa 6 mtpa (Q3FY28), Pune 3 mtpa (Q2FY28), with FY27 capex of Rs 3,200-3,400 cr and leverage of 1.47x net debt/EBITDA kept below the 2x ceiling.
- 03Margin recovery: FY26 EBITDA rose 28% to Rs 3,083 cr (OPM 21% vs 17%) and PAT rose 66% to Rs 1,157 cr; Q1FY27 EBITDA/tonne of Rs 1,055 is above ICRA's FY27 industry estimate of Rs 880-930/t, and cost-saving programme targets Rs 150-200/t (Rs 45-50/t achieved).
- 04South-India pricing is improving - management cited Rs 10-15/bag hikes in the South in Q1FY27 and industry-wide 6-7% increases in South/East in April 2026 - the regions where Dalmia has its highest share.
- 05Value construct: at 1.8x book with 55.8% promoter holding and a 20% dividend payout, downside is cushioned relative to Shree (52x P/E) and Ramco (108x P/E) if the FY28 capacity ramp lifts ROE from the current 6%.
Reference close, with results-period markers
- 1Q Sep-25 end · 30 Sept 2025
- 2Q Dec-25 end · 31 Dec 2025
- 3Q Mar-26 end · 31 Mar 2026
- 4Q Jun-26 end · 30 Jun 2026
Quality score, technicals and Buoyant Score
Computing the scorecard…
Latest quarter · Q Jun-26
| Line (₹ cr) | Q Jun-26 | YoY | QoQ |
|---|---|---|---|
| Net Sales | 3,890 | +7.0% | −8.4% |
| Operating Profit | 805 | −8.8% | −10.8% |
| Net Profit | 188 | −52.2% | −51.4% |
Reported vs internal estimate: internal quarterly estimates are not in the supplied package; consensus feed not licensed. YoY/QoQ per PRD §12.5 (transitions, not %, on non-positive bases).
Position and valuation context
General industrial/consumer/IT preset: growth, margins, ROCE/ROIC, working capital, FCF, net debt; P/E, EV/EBITDA.
Sell-side targets are third-party views, not Buoyant's; the upside is recomputed on our reference close, so it differs from the figure printed at the broker's price date.
Valuation range
No headline target on this page; the book quotes the thesis and the risk rather than a target.
What we watch
- Commissioning of the 3 mtpa Belgaum unit in Q4FY27 (Jan-Mar 2027) - first step to 66.7 mtpa.
- Q2FY27 results (late Oct-2026) showing JP assets' ramp (first shipment 20-Jun-2026) and whether the South price hikes held through the monsoon.
- Any further bolt-on acquisition at or below replacement cost, or a re-rating as leverage stays below 2x through the capex cycle.
- East-India pricing remains depressed (management declined to guide on East prices) and Q2FY27 costs are guided up Rs 70-80/t, so EBITDA/tonne could slip below Rs 1,000 in the monsoon quarter.
- Integration risk: the JP assets need 7-8 quarters to reach Dalmia's normal EBITDA/tonne, and net debt tripled QoQ to Rs 4,431 cr with Rs 3,200-3,400 cr of FY27 capex still to spend.
- Structurally low ROE (6.1% FY26, 5% three-year) and five-year sales CAGR of only 8%; screener flags both; earnings have been downgraded by some brokers to Sell/Hold in early 2026.