Prabhudas Lilladher has assigned a target price of Rs 2,173 for Dalmia Bharat, citing capacity expansion as a growth driver. However, investors are balancing this with recent challenges, including a 51.4% year-on-year profit decline in Q1 FY27 and the company's upcoming removal from the F&O segment on August 28, 2026.
Prabhudas Lilladher has maintained a positive outlook on Dalmia Bharat, revising its price target to Rs 2,173. The brokerage highlights the company’s long-term potential, driven by capacity expansions and the strategic entry into central markets. The report estimates a robust 11% volume compound annual growth rate (CAGR) between FY26 and FY29. Management expects total capacity to reach 70 million tonnes per annum (mtpa) by the end of FY28, with a long-term goal of 110 mtpa. These projections are based on the successful commissioning of projects in the South and West regions, along with the integration of acquired assets.
While the brokerage is optimistic about long-term capacity, Dalmia Bharat is currently navigating a difficult period as reflected in its latest quarterly performance. For the first quarter of FY27, the company reported a net profit of Rs 192 crore, marking a 51.4% decline compared to the same period last year. This sharp drop was largely attributed to a one-time exceptional charge of Rs 182 crore related to the acquisition of cement assets from Jaiprakash Associates.
Financial metrics from the recent quarter indicate that profitability remains under pressure. The EBITDA margin stood at 20.7%, which represents a decline of 360 basis points year-on-year. Furthermore, the company’s leverage has increased, with the net debt-to-EBITDA ratio rising to 1.47x. This rise in debt levels is a key factor that analysts and investors are monitoring, as it reduces the company’s immediate financial flexibility while it absorbs the costs associated with its expansion strategy.
Beyond the financials, market participants are also reacting to technical changes involving the stock. The BSE has announced that Dalmia Bharat will be excluded from the derivatives, or Futures and Options (F&O), segment effective August 28, 2026. Such exclusions often lead to shifts in trading volumes and liquidity, which can cause increased price volatility in the near term.
The investment case for Dalmia Bharat currently rests on its ability to execute its capacity plans and improve its margins despite the ongoing cost pressures in the central region. The brokerage expects that measures like increasing the use of renewable energy, improving logistics, and adopting waste heat recovery systems will eventually help in cost optimization. Investors tracking the company may focus on the efficiency of the Jaiprakash Associates asset integration, the stabilization of profit margins in the coming quarters, and how the company manages its debt levels amidst ongoing capital spending.