Motilal Oswal Assigns Buy On Midcap Cement Stock, Turning 250% Ex-Dividend This Week

Motilal Oswal has come up with a Buy recommendation on the stock of Dalmia Bharat Ltd. (DALBHARA) with a target price of Rs. 2,550 apiece. The stock is showing a potential upside of 15% given the target price and the current market price of the stock.

DALBHARA has recently announced the "Record Date" for the 250% final dividend i.e. Rs. 5/share of Rs 2 each for the financial year 2022-23. The Board recommended the final dividend on April 25, 2023, while the record date is June 08, 2023.

This is a Midcap stock operating in the Cement sector. It has a market capitalisation of Rs. 41,958.10 crore.

Final Dividend & Record Date

According to a regulatory filing by the Board Of Directors of Dalmia Bharat Ltd., "Recommend Final Dividend at the rate of Rs. 5/- (250%) per equity share on 18,74,80,361 equity share of Rs. 2/- each for the financial year ended March 31, 2023. The dividend, upon approval of the shareholders in the ensuing Annual General Meeting shall be paid to eligible shareholders."

According to an exchange filing by the Board Of Directors of Dalmia Bharat Ltd., "Pursuant to Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that the Company has fixed Friday, June 23, 2023 as the "Record Date" in respect of final dividend for the Financial Year 2022-23 of Rs. 5/- per equity share (250%) recommended by the Board of Directors at its meeting held on April 25, 2023."

Buy for a Target Price of Rs. 2,550 apiece

Accoring to Motilal Oswal Financial Services, The management has outlined its future roadmap, which focuses on expansion (through mix of organic and inorganic routes), higher share of premium products and RE, and raw material security. Some of its priorities in FY24 include the timely completion of ongoing expansion and the successful integration of JPA cement assets. The stock trades at 14x/11.2x FY24E/FY25E EV/EBITDA ratio and an EV/t of USD109/USD106. It traded at an average one-year forward EV/EBITDA ratio of 10x/9.5x in the last 5/10 years.

"With an expected improvement in earnings (25% CAGR over FY23-25E) and its focus on capacity expansions without leveraging the balance sheet, we expect the stock to trade at higher multiples. We value DALBHARA at 13x FY25E EV/EBITDA to arrive at a TP of INR2,550, an upside of 14% from current levels. We maintain our BUY rating on the stock," the brokerage firm has said.

Stock Outlook

On Tuesday, the stock opened at Rs. 2,235 apiece, currently trading at 0.33% down at Rs. 2,234.90 apiece on On NSE. It traded the 52 week high at Rs. 2,288.80 apiece on 16 June 2023, while the 52 week low at Rs. 1,212.50 apiece on 20 June 2022.

The stock surged 3.65a5 in 1 week. It jumped 8.67% in 1 month and 24.27% in 3 months, respectively. It has given 78.39% positive return in 1 year, and 272.88% positive return in 3 years, respectively. Its share price jumped 97.62% since listing on 22 January 2019 on the exchange.

Disclaimer - The stock of Dalmia Bharat has been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.