Buy Dalmia Bharat Ltd for the Target Rs. 2,405 by Choice Institutional Equities
Key Conference Call Highlights
FY28 capacity target intact
* Management remains on track to achieve 75 MTPA cement capacity by FY28 and long-term ambition remains 110–130 MTPA capacity
* Ongoing projects at Belgaum, Pune and Kadapa will take capacity to 61.5 MTPA within 18–20 months
Significant cost inflation expected
* Management expects INR 125–150/t cost inflation in Q1FY27 versus Q4FY26
* Packaging cost alone could increase by INR 80–90/t. Remaining inflation driven by fuel, power and logistics cost
* Petcoke prices have surged to around USD 160/t, further impacted by rupee depreciation
Margin protection through pricing
* April price hikes have so far fully offset cost inflation. Management remains optimistic on sustaining positive pricing momentum
* DALBHARA strategy is not just to recover costs but to expand profitability through pricing and premiumisation
Cost reduction program continues
* DALBHARA targets annual internal cost savings of INR50–100/t
* Fuel mix optimisation and alternative sourcing remain key levers
* Dynamic shift toward washed coal and local petcoke to reduce imported fuel dependence
Market share recovery focus
? Management has acknowledged market share losses over the last few years.
? DALBHARA strategy now focused on profitable volume growth rather than chasing low-quality volumes
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SEBI Registration no.: INZ 000160131
