Dalmia Bharat - On Path To Be A National Player: ICICI Securities

ICICI Securities Report

Dalmia Cement Bharat Ltd., a wholly-owned subsidiary of Dalmia Bharat Ltd., has entered into a binding ‘framework agreement’ for the acquisition of clinker, cement and power plants from Jaiprakash Associates and its associate.

As per the agreement, Dalmia Bharat shall acquire 9.4 million tonnes per annum cement assets (25% of existing capacity) and 6.7 mtpa clinker assets besides 280 mega watt thermal power plant at an enterprise of Rs 56.7 billion implying a capital cost of ~$73/tonne (FY18 Ultratech Cement Ltd.-Jaiprakash Associates deal was at ~$93/tonne).

On completion of the deal, Dalmia Bharat's grinding/clinker capacity shall increase to ~46/28 mtpa respectively and strengthen its presence in Central India markets.

It aims to be a pan-India cement company with capacity of 75 mtpa by FY27 and 110‐130 mtpa by FY31.

We await the completion of the deal before factoring-in the acquired capacity; however, we increase our realisation growth assumption for FY23E/FY24E given the healthy price hikes in East and South India (~90% of Dalmia Bharat’s capacity exposure is to these regions) during the current quarter (Q3 FY23).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.