Why did YES Securities downgrade Dalmia Bharat to 'Sell'? Check target

Dalmia Bharat reported net profit of ₹239 crore in the September 2025 quarter (Q2FY25), up nearly fivefold from ₹49 crore in the year-ago period

Dalmia Bharat share price today: Shares of New Delhi-based cement manufacturer Dalmia Bharat fell nearly 2 per cent on Thursday, October 23, 2025, to hit an intraday low of ₹2,148 on the NSE. In the last three sessions, including the Diwali Muhurat trading session, the stock has dropped over 4 per cent.

 

Around 12:00 PM, the Dalmia Bharat shares continued to trade lower, down 1.5 per cent at ₹2,151.9 compared to the previous session's close of ₹2,185.4. In comparison, NSE Nifty was trading 0.72 per cent higher at 26,054 levels.

Dalmia Bharat Q2 results

Dalmia Bharat reported net profit of ₹239 crore in the September 2025 quarter (Q2FY26), up nearly fivefold from ₹49 crore in the year-ago period. The company's revenue for the quarter increased by 11.4 per cent year-on-year (Y-o-Y) to ₹3,417 crore from ₹3,087 crore last year. However, on a sequential basis, revenue declined 6 per cent from ₹3,636 crore in the previous quarter. According to YES Securities, the revenue decline was largely due to the seasonally weak Q2 (extended monsoon and festive period concentration), which impacted volumes.

 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) increased by 60 per cent to ₹696 crore, while Ebitda margin rose to 20.4 per cent from 14 per cent in the year-ago quarter. Sequentially, Ebitda margin fell 392 basis points,  due to seasonal demand weakness, a 5 per cent decline in realisation and lower operating leverage due to volume decline from the Q1 base. 

 

The company also declared an interim dividend of ₹4 per share.    ALSO READ | Titan rallies 13% thus far in October, nears record high; here's why

YES Securities downgrades Dalmia Bharat

According to analysts at YES Securities, although Dalmia Bharat's capacity utilisation rate (CUR) inched up to 56 per cent in the September 2025 quarter (Q2FY26), compared to 54 per cent in the year-ago period, the average utilisation for H1FY26 remained low at 56 per cent, despite strong positioning in its core markets (East and South). 

 

While the industry is expected to witness a demand pickup from H2FY26E onwards, the brokerage said Dalmia Bharat may face challenges from both regional and larger players in gaining market share. Hence, YES Securities does not expect any significant improvement in the company's CUR in the near term. 

 

Given the backdrop of low CUR, pricing pressure, and heightened competition in key markets, despite improved cost efficiency, YES Securities is projecting a Revenue/Ebitda/Adjusted PAT CAGR of 8 per cent/18 per cent/15 per cent over FY25-FY28E.

 

"Post the GST rate cut, although there could be a pricing opportunity for the industry, we do not anticipate any meaningful near-term price hikes unless input costs rise further," the brokerage said. On a year-on-year (Y-o-Y) basis, the company’s realisations appear strong mainly due to a low base effect, despite higher sales from

the premium segment. However, pricing pressure from peers is expected to persist in the near term. YES Securities is factoring in an average realisation growth of 1-1.05 per cent over FY27E-FY28E.

 

The brokerage has updated its valuation by rolling it forward to FY28E and applying a revised EV/Ebitda multiple of 10x for September 2027 (down from 12x previously), resulting in a new target price of ₹1,732 compared to the earlier ₹2,197. Consequently, it has downgraded the stock from 'Reduce' to 'Sell'. Key upside risks include higher-than-expected capacity utilisation, improved realisations, and enhanced cost efficiency.