Dalmia Bharat Q2 Results Review - Lower Realisation Hits Ebitda Margins; Retain Buy: Axis Securities

Axis Securities Report

In Q2 FY25, the company’s performance was subdued due to lower realization, resulting in operating performance below expectations. Despite these challenges, the outlook remains positive due to strong demand drivers, particularly from infrastructure development.

Cement demand is anticipated to remain robust, driven by large-scale infrastructure projects and affordable housing initiatives.

The cement sector is projected to grow at 1.2 times GDP growth, with India's GDP estimated to grow by 6.5%-7% over the next few years.

Given the company’s strong positioning in key markets of East and South, exposure to the West region, the government’s focus on infrastructure and low-cost housing, increasing real estate demand, new capacity ramp-up, and the company’s cost optimization measures, Dalmia Bharat is expected to deliver stable performance moving forward.

The company is projected to grow its volume/revenue/Ebitda/ adjusted profit after tax at a CAGR of 9%/7%/9%/17% over FY24-FY26E. Pricing remains a key factor to monitor closely.

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