Why Does Choice Equity See Upside Potential in Dalmia Bharat Despite Market Volatility?
Choice Equity Broking has reiterated its BUY recommendation on Dalmia Bharat Ltd with a revised target price of ₹2620 per share. The brokerage highlights that capacity additions, cost efficiencies, renewable energy expansion, and disciplined capital allocation continue to drive strong earnings visibility through FY28.
According to the report, Dalmia Bharat’s focus on operational efficiency, strategic capacity expansion, and commitment toward sustainability are the core reasons behind its positive rating. The company’s improving margins, along with exposure to infrastructure and housing demand, make it a long-term structural play in India’s cement sector.
The brokerage expects Dalmia Bharat to outperform peers, supported by steady pricing power and efficiency-driven volume growth. With increasing infrastructure investments and rural housing revival, cement demand outlook remains strong, giving the company multiple growth levers in FY26–FY28.
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Choice Equity’s valuation framework assumes that Dalmia Bharat will achieve better-than-industry average margin expansion due to its capacity-led economies of scale and renewable power integration. The company’s green cement focus and gradual transition to renewable energy sources are expected to reduce production costs while supporting ESG-conscious investor interest.
The following valuation metrics summarize the brokerage’s key financial assumptions and sector comparisons for FY28E:
| Metric | Dalmia Bharat FY28E | Industry Average |
|---|---|---|
| EV / EBITDA | 10.9x | 11.7x |
| P / BV Ratio | 2.3x | 2.7x |
| Expected Volume CAGR (FY25–28) | 11% | 8% |
| Operating Margin | 19.5% | 17.8% |
| Debt-to-Equity Ratio | 0.2x | 0.6x |
The brokerage sees further upside from potential expansion in renewable power and waste heat recovery systems (WHRS), which could strengthen the company’s ESG positioning and reduce its long-term energy costs. Dalmia’s cost-efficient capacity additions are expected to sustain its profitability even amid input price fluctuations.
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Choice Equity also noted that Dalmia Bharat’s debt-light structure, stable cash flows, and focus on renewable energy transitions differentiate it from peers. With India’s cement demand expected to grow at 6–7% CAGR till FY30, Dalmia’s combination of balance sheet strength and expansion visibility provides a strong investment case for long-term investors.
Additionally, improving demand in rural and infrastructure sectors under the government’s continued capital expenditure push supports the medium-term outlook for cement stocks. Dalmia’s capacity ramp-up in southern and eastern regions positions it favorably for capturing this growth wave.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, views Dalmia Bharat as a structurally strong cement play with healthy leverage ratios and strategic renewable focus. The brokerage’s optimism aligns with broader cement sector recovery and policy-driven infrastructure momentum. Investors may consider accumulation on dips, keeping a long-term horizon for potential compounding returns.
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Related Queries on Cement Sector Analysis
- What Makes Dalmia Bharat a Top Pick in the Cement Sector?
- How Does Renewable Energy Expansion Strengthen Dalmia Bharat’s Margins?
- Why Is Choice Equity Bullish on Cement Stocks for FY26–FY28?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
