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Dalmia Bharat Ltd.’s Q1 FY23 performance was above our estimates driven by an all round beat. Ebitda/operating profit margin stood at Rs 6 billion/18% (our estimate: Rs 5 billion/16%). Ebitda/tonne at Rs 945 (our estimate: Rs 848).
Variable cost increase for Dalmia Bharat is the lowest among its peers due to a higher clinker-to-cement conversion ratio.
We raise our FY23/FY24 Ebitda estimate by 10%/2%, which is driving the earnings per share increase of 26%/3%.
We like the stock owing to its growth plans, locational advantage in East India, and cost reduction measures.
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