Emkay says 'Add' Dalmia Bharat on demand revival, capacity expansion plans

Emkay Global retains Add on Dalmia Bharat with a ₹2,450 target, citing capacity expansion, cost savings and improving cement demand outlook from 2026

Dalmia Bharat share price today

Analysts at domestic brokerage firm Emkay Global Financial Services have retained their 'Add' rating on Dalmia Bharat stock with an unchanged target price of ₹2,450, appreciating the management’s focus on capacity expansion and cost efficiency.

 

Though the brokerage flags near-term demand and pricing pressures, particularly in East India, it lauded the company's focus on medium-term cement capacity target of around 62 million tonnes per annum (MTPA) by Q2FY28, up from about 50 MTPA currently with projects underway at Kadapa, Pune, and Belgaum.

 

Over the long-term, Dalmia Bharat aims to scale up to nearly 70 MTPA, aided by a proposed greenfield expansion of 5-6 MTPA at Jaisalmer in Rajasthan and additional grinding unit (GU) expansions in the Northeast and eastern regions.

 

"The Jaisalmer project is positioned as a key building block in Dalmia's journey toward a pan-India presence, excluding Central India. The management indicated that statutory approvals are in progress," Emkay Global noted post its interaction with the management.

 

The brokerage said that the company has secured limestone blocks at a relatively modest premium of around 22 per cent, among the lowest in the sector, which, along with state incentives, should help maintain healthy unit economics.

 

In the Northeast, Dalmia plans a low lead-time expansion of 2–2.5 MTPA grinding capacity, to be serviced from a new kiln at Umrangso, Assam, the management said.  ALSO READ | InCred Equities upgrades Tata Elxsi stock to 'Hold', lifts target to ₹5,639

Dalmia Bharat on cement demand trends

 

On the demand front, the management observed early green shoots in December after a sluggish October–November period, which was impacted by prolonged monsoons, goods and services tax (GST)-related inventory adjustments, and other disruptions.

 

Dalmia Bharat expects mid-to-high single-digit volume growth in the October-December quarter of the current financial year (Q3FY26), with second-half (H2FY26) performance likely to be broadly in line with industry trends, the brokerage said.

 

The management, however, pointed out that demand in parts of East India, excluding the Northeast, remains subdued due to elections and administrative transitions. Despite this, it remains constructive on the medium-term outlook, citing Bihar and the broader eastern region as key growth drivers.

 

"Weak demand during Q3FY26 to date has weighed on pricing, particularly in the non-trade segment, where prices declined by ₹20–25 per bag. This is expected to result in a 3-4 per cent quarter-on-quarter drop in blended realizations," Emkay highlighted.

 

Nonetheless, the management remains focussed on disciplined execution and profitability over aggressive volume chasing, especially in eastern operations.  ALSO READ | Aarti Industries stock set to rise? PL Capital upgrades to 'Accumulate'

Dalmia Bharat's cost saving, capex initiatives

 

Dalmia Bharat said it aims to adhere to its capex guidance of ₹1,000–1,050 crore through FY28 (excluding Jaisalmer) and is on track to deliver operating cost savings of ₹150–200 per tonne by FY27.

 

"Around ₹50 per tonne of savings have already been achieved, with further benefits expected from logistics optimisation, improved clinker factors, higher renewable energy usage, and the removal of the GST compensation cess on coal," the management said.

 

It forecasts savings of ~₹40/50 crore in FY26/27 due to removal of GST compensation cess of ₹400/tonne on coal.  ALSO READ | Why did Geojit downgrade Astra Microwave to 'Accumulate'? Check target

Dalmia Bharat share price history and stock strategy

Dalmia Bharat share price gained 2.2 per cent on the National Stock Exchange (NSE) on Tuesday in the intraday trade, hitting a high of ₹2,060 per share.

 

The stock has gained around 16 per cent on the NSE, thus far, in calendar year 2025, and is up 2 per cent in the last one month.

 

While Dalmia Bharat shares have surged 16 per cent in three year, they have jumped 97.5 per cent in the last five years.

 

Emkay Global analysts believe the recent stock price correction of around 20 per cent over three months has largely priced-in near-term pricing weakness, providing a decent entry point.

 

"We see the industry pricing environment improving from January 2026, mainly in East/South India. Hence, any price hike in ensuing months will lead to better stock returns for Dalmia," the brokerage said, valuing Dalmia at 11x EV/Ebitda on Sept 2027 estimates.

   

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