The share price of Dalmia Bharat tumbled 4.13% to Rs 2,226.15 during the intra-day trade on Tuesday. Despite today’s downfall in the stock price of the company, the brokerage houses have shown optimism on the stock. The share price, however, surged 3.52% yesterday on the news of the company’s earnings in Q2. The company on Saturday, October 14, reported 55% year-over-year growth in EBITDA to Rs 590 crore, driven by lower costs. 

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Let’s delve into the calls of some of prominent brokerage houses-

HDFC Securities: Buy –  Target Price: Rs 2,560

“We maintain our ‘Buy’ rating on Dalmia Bharat with an unchanged TP of Rs 2,560/sh (13x its Sep-25E consolidated EBITDA). We continue to like Dalmia for its healthy volume, margin, and comfortable balance sheet outlook. In Q2FY24, Dalmia reported sub-par volume growth (+7% YoY) on market share loss in the east. However, unit EBITDA recovered Rs 85/MT QoQ (up Rs 300/MT YoY) to Rs 955/MT, on cool-off in fuel and freight expenses. We estimate the company to deliver 15% volume CAGR during FY23-26E, supported by ongoing expansions. We estimate unit EBITDA will rebound to Rs 1,000/MT H2FY24 onwards, benefitting from fuel cost reductions, the rising share of green power, and op-lev gains (as utilization rises).

InCred Equities: Add – Target Price: 2,570

“Dalmia Bharat trades at FY25F/26F EV/EBITDA multiple of 13.4x/11.2x, respectively. We retain ‘Add’ rating on it with a Sep 2024F target price of Rs 2,570 (Rs 2,220 earlier), set at one-year forward EV/EBITDA of 13x (12x earlier). Weak demand, pricing pressure, rise in input cost, delay in ramp-up of JPA assets, and any delay in expansion are key downside risks.”

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Choice Broking: Add – Targe Price: 2,515

“The Company is majorly focusing on cost optimization and is incurring significant capex which will in turn fuel growth.  As per our FY26E estimates, we are expecting Revenue/EBITDA/PAT to grow at a CAGR of 6.0%/22.0%/15.0% respectively over FY23-FY26E. Our target EV/EBITDA multiple remains unchanged at 12x, hence we have ascribed a target price of Rs 2,515, Upgrading our rating to ‘Add’ from Neutral.”