DALBHARAT - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.2

🧱 Fundamental Analysis: Dalmia Bharat Ltd. (DALBHARAT)

Dalmia Bharat is a major player in India’s cement industry, with a strong brand and scale. However, its current valuation and weak capital efficiency metrics raise concerns for long-term investors despite recent profit growth.

Metric Value Implication

P/E Ratio 44.6 Slightly undervalued vs. industry PE of 51.1, but still expensive

PEG Ratio -21.9 Negative PEG — indicates earnings volatility or contraction

ROCE / ROE 5.58% / 4.15% Weak — poor capital efficiency

Dividend Yield 0.41% Low — not attractive for income investors

Debt-to-Equity 0.33 Moderate — manageable but not ideal

EPS ₹49.8 Strong earnings base

Qtr Profit Var +70.7% Excellent growth — short-term momentum

FII/DII Holding Change -0.06% / +0.94% DII accumulation — positive institutional sentiment

📉 Technical Analysis

Current Price: ₹2,199

DMA 50 / DMA 200: ₹2,137 / ₹1,971 → Trading above both; bullish trend

RSI: 51.4 → Neutral zone; no strong momentum

MACD: +29.9 → Bullish crossover; short-term strength

Volume: Below average — weak conviction in recent move

💰 Ideal Entry Price Zone

₹2,000–₹2,100

This range aligns with DMA support and offers a better margin of safety

Avoid fresh entry above ₹2,250 unless ROCE improves and PEG normalizes

📈 Long-Term Investment Outlook

Strengths

Strong EPS and recent profit surge

Moderate debt — financially stable

DII accumulation — institutional confidence

Cement sector tailwinds — infrastructure and housing demand

Risks

ROCE and ROE < 6% — poor long-term compounding potential

PEG < 0 — earnings volatility or poor visibility

Low dividend yield — not ideal for conservative investors

Volume and RSI suggest limited short-term momentum

Dalmia Bharat is a cyclical value play, not a compounding machine. It may suit tactical investors betting on infrastructure growth, but long-term holders should be cautious unless capital efficiency improves.

🏁 Exit Strategy / Holding Period

If you already hold DALBHARAT

Holding Period: 1–2 years with close monitoring of quarterly results

Exit Strategy

Consider trimming near ₹2,300–₹2,350 (recent high)

Reassess if ROCE stays below 8% or PEG remains negative

Hold only if earnings growth sustains and margins expand

Would you like a peer comparison with UltraTech Cement, Shree Cement, or JK Cement to explore stronger capital efficiency and long-term growth potential?

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