DALBHARAT - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.8
| Stock Code | DALBHARAT | Market Cap | 40,285 Cr. | Current Price | 2,149 ₹ | High / Low | 2,496 ₹ |
| Stock P/E | 276 | Book Value | 415 ₹ | Dividend Yield | 0.42 % | ROCE | 2.56 % |
| ROE | 2.36 % | Face Value | 2.00 ₹ | DMA 50 | 2,100 ₹ | DMA 200 | 2,095 ₹ |
| Chg in FII Hold | -0.83 % | Chg in DII Hold | 1.18 % | PAT Qtr | 22.0 Cr. | PAT Prev Qtr | 14.0 Cr. |
| RSI | 54.7 | MACD | -1.78 | Volume | 1,81,928 | Avg Vol 1Wk | 3,96,823 |
| Low price | 1,601 ₹ | High price | 2,496 ₹ | PEG Ratio | -87.0 | Debt to equity | 0.00 |
| 52w Index | 61.2 % | Qtr Profit Var | 214 % | EPS | 7.68 ₹ | Industry PE | 30.8 |
📊 Analysis: Dalmia Bharat (DALBHARAT) shows weak efficiency metrics with ROE at 2.36% and ROCE at 2.56%, far below industry standards. Debt-to-equity is 0.00, reflecting a debt-free balance sheet, which is positive. Dividend yield is low at 0.42%, offering limited income support. EPS of 7.68 ₹ is modest relative to valuation. The stock trades at an extremely high P/E of 276 compared to industry average of 30.8, suggesting severe overvaluation. PEG ratio is negative (-87.0), indicating poor growth prospects relative to valuation. Quarterly PAT improved from 14 Cr. to 22 Cr. (+214%), but absolute profit levels remain low. Technicals show neutral momentum with RSI at 54.7 and MACD negative (-1.78).
💰 Ideal Entry Zone: Considering DMA levels (50 DMA at 2,100 ₹, 200 DMA at 2,095 ₹) and support near 1,600 ₹, the ideal entry zone is 1,750–1,850 ₹. Current price (2,149 ₹) is significantly above comfort zone, making fresh entry unattractive.
📈 Exit / Holding Strategy: For existing holders, short-to-medium term holding (1–2 years) is advisable to capitalize on momentum. Exit strategy: consider profit booking near 2,450–2,500 ₹ resistance zone. Long-term holding is not recommended unless ROE improves above 10% and earnings growth sustains.
Positive
- ✅ Debt-free balance sheet (Debt-to-equity 0.00).
- ✅ Quarterly PAT growth (+214%) shows earnings rebound.
- ✅ DII holdings increased (+1.18%), reflecting domestic institutional confidence.
Limitation
- ⚠️ Very weak ROE (2.36%) and ROCE (2.56%).
- ⚠️ Extremely high P/E (276) compared to industry average (30.8).
- ⚠️ Negative PEG ratio (-87.0) indicates poor growth prospects.
- ⚠️ Dividend yield (0.42%) is negligible.
Company Negative News
- 📉 FII holdings decreased (-0.83%), showing reduced foreign confidence.
- 📉 MACD negative (-1.78), indicating weak momentum.
- 📉 Absolute profit levels remain low despite growth.
Company Positive News
- 📈 PAT improved from 14 Cr. to 22 Cr.
- 📈 DII holdings increased (+1.18%), reflecting domestic support.
Industry
- 🏦 Industry P/E at 30.8 highlights DALBHARAT trades at a steep premium.
- 🏦 Cement sector has long-term demand potential driven by infrastructure and housing growth, but efficiency is critical for sustainability.
Conclusion
🔎 Dalmia Bharat is a debt-free company with recent profit rebound, but weak efficiency metrics and extremely stretched valuations limit its attractiveness for long-term compounding. Ideal entry zone is 1,750–1,850 ₹. Suitable only for short-to-medium term holding, with exit near 2,450–2,500 ₹ unless ROE and profitability improve significantly.