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Dolat Capital Report
Dalmia Bharat Ltd.'s Q2 FY25 volume/revenue came in-line, but realisation, Ebitda, Ebitda/tonne were below estimates and adjusted profit after tax was above estimates.
We expect revenue/Ebitda/adjusted profit after tax compound annula growth rate of 5.9%/10.3%/15.6% over FY24-27E led by 4.6%/9.2%/8.5% volume growth and -6.2%/2.0%/0% realization growth in FY25E/FY26E/FY27E.
We factor an increase in net debt from Rs 1.8 billion in FY24 to Rs 30.5 billion/Rs 43.8 billion in FY26E/FY27E considering Rs 35 billion/Rs 40 billion/Rs 35 billion capex in FY25E/FY26E/FY27E.
We change our FY25E/FY26E Ebitda estimates by -8.0%/+1.3% post factoring lower volume coupled with lower realization/tonne and introduce FY27E.
Accordingly, we maintain ‘Accumulate' rating with revised target price of Rs 2,030 based on 11 times FY27E enterprise value/Ebitda + 50% of FY27E capital work in progress.
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