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Dalmia Bharat Delivers Strong Q4 on Price Hikes and Cost Savings
Dalmia Bharat Limited posted impressive Q4FY26 operating results, beating analyst estimates. The gains came from a 1.5% rise in average selling prices quarter-over-quarter, supported by strategic price increases. The company also managed costs effectively, cutting freight expenses by shipping more directly and keeping power and fuel costs stable, partly due to using more renewable energy. This helped push EBITDA per tonne to INR1,025, above Prabhudas Lilladher's forecast of INR938.
Cost Savings Strategy to Boost Margins
Despite challenges from rising costs, such as higher pet coke prices and logistics inflation, Dalmia Bharat's management is committed to ongoing cost optimization. The company achieved about INR100 per tonne in cost savings in FY26. For FY27, management aims for additional savings of INR50-100 per tonne through efficiency improvements. This push for cost reduction is expected to help maintain strong profit margins.
Analyst Raises Dalmia Bharat Target Price to Rs 2,287
Prabhudas Lilladher has revised its EBITDA forecasts for FY27 and FY28 downward by 7.9% and upward by 0.5%, respectively. These adjustments reflect expectations of lower volumes, higher costs, and increased pricing. The brokerage predicts an 11% compound annual growth rate (CAGR) for EBITDA from FY26 to FY28, despite economic inflation. Currently, Dalmia Bharat shares trade at 11.2 times its FY27 estimated EV/EBITDA and 9.3 times its FY28 estimated EV/EBITDA. Prabhudas Lilladher reiterated its 'BUY' rating and increased the target price to Rs 2,287 from Rs 2,250. The new target is based on an 11x multiple of March 2028 estimated EV/EBITDA.