Heidelberg Cement Q2 Results Review - Muted Volume Growth Due To Lack Of Immediate Expansion: Dolat Capital

Dolat Capital Report

Heidelberg Cement India Ltd.s Q2 FY25 results were below estimates; however, realization was in line.

We expect revenue/Ebitda /adjusted profit after tax compound annual growth rate of 2.2%/11.3%/16.0% over FY24-27E led by -2%/+5%/+5% volume growth and -3.2%/2.0%/0.0% realization growth in FY25E/FY26E/FY27E.

We decrease our FY25E/FY26E Ebitda estimates by 16.9%/14.7%, post factoring lower volume growth and higher opex/tonne. We also introduce FY27E.

Anticipating subdued volume growth without any major expansion plans over FY25-27E, we maintain our ‘Sell’ rating with revised target price of Rs 168 (7.0 times FY27E EV/Ebitda + 50% FY27E capital work in progress).

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