Dalmia Bharat gains 3% after Q3 net profit jumps 22%

Dalmia Bharat shares gained 2.8 percent in trade on January 25 after the cement manufacturing company reported a 22.2 percent year-on-year growth in net profit.

Net profit for the quarter ended December came in at Rs 266 crore, with healthy operating numbers.

As of 9.30am, shares of the company were trading at Rs 2,198.05, higher by 2.01 percent on the NSE, compared to the previous session’s closing price.

Dalmia Bharat‘s revenue from operations grew by 7.3 percent to Rs 3,600 crore, compared to the year-ago period. Its EBITDA for the quarter jumped 20.3 percent to Rs 775 crore, and its EBITDA per tonne soared 11.3 percent to Rs 1,138 compared to the corresponding period of the last fiscal.

The volume growth for the quarter was around 8 percent on-year, beating estimates of 5 percent. Estimates were lower since commentary by peers and dealers indicated severe weakness in demand in the eastern region which is the key market for Dalmia.

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“Dalmia’s growth could have partly benefited from the higher tolling volumes in the central region,” said Jefferies. The brokerage retained the ‘buy’ rating on the counter, with a price target of Rs 2,940 apiece.

Jefferies added that the reported net debt fell to Rs 4.3 billion as against Rs 15 billion on a sequential basis, partly on increase in MTM value of the company’s investment in IEX and on receipt of payment from promoters related to sale on non-core businesses.

Morgan Stanley maintained its ‘overweight’ call on the cement player, with a target price of Rs 2,750 per share. The quarter saw lower realisations, but higher volumes, but the benefits were offset by higher opex.

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