DALBHARAT - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 1.8
| Stock Code | DALBHARAT | Market Cap | 37,755 Cr. | Current Price | 2,013 ₹ | High / Low | 2,496 ₹ |
| Stock P/E | 288 | Book Value | 415 ₹ | Dividend Yield | 0.44 % | ROCE | 2.56 % |
| ROE | 2.36 % | Face Value | 2.00 ₹ | DMA 50 | 2,078 ₹ | DMA 200 | 2,089 ₹ |
| Chg in FII Hold | 0.52 % | Chg in DII Hold | 0.44 % | PAT Qtr | 14.0 Cr. | PAT Prev Qtr | 33.0 Cr. |
| RSI | 47.6 | MACD | -5.42 | Volume | 1,44,232 | Avg Vol 1Wk | 1,92,332 |
| Low price | 1,601 ₹ | High price | 2,496 ₹ | PEG Ratio | -90.9 | Debt to equity | 0.00 |
| 52w Index | 46.0 % | Qtr Profit Var | 40.0 % | EPS | 6.98 ₹ | Industry PE | 33.2 |
📊 Analysis: DALBHARAT shows weak fundamentals for long-term compounding. ROE at 2.36% and ROCE at 2.56% are far below ideal thresholds. Valuation is extremely stretched with P/E at 288 compared to industry average of 33.2, and PEG ratio (-90.9) highlights poor growth-adjusted valuation. Dividend yield at 0.44% is modest, while debt-to-equity at 0.00 reflects a debt-free balance sheet. EPS at 6.98 ₹ is low relative to market cap. Technicals show RSI at 47.6 (neutral), MACD negative (-5.42), and price hovering near both 50 DMA (2,078 ₹) and 200 DMA (2,089 ₹), indicating consolidation with bearish bias. Quarterly PAT dropped sharply (33 Cr. to 14 Cr.), raising concerns about earnings sustainability.
💡 Entry Zone: Safer entry would be in the 1,600–1,750 ₹ range, aligning with valuation comfort and support levels. Current price (2,013 ₹) is well above fair entry zone, making risk-reward unattractive.
📈 Exit Strategy: If already holding, consider tactical exit near 2,100–2,200 ₹ resistance. Long-term holding is not favorable unless ROE improves above 12–15% and earnings growth stabilizes. Suggested holding period: short-term (6–12 months) rather than multi-year compounding.
Positive
- 📌 Debt-free balance sheet (Debt-to-equity 0.00)
- 📌 Institutional interest: FII (+0.52%) and DII (+0.44%) holdings increased
- 📌 EPS at 6.98 ₹ shows profitability despite weak margins
Limitation
- ⚠️ Extremely high valuation: P/E 288 vs industry 33.2
- ⚠️ Weak ROE (2.36%) and ROCE (2.56%) below compounding thresholds
- ⚠️ Negative PEG (-90.9) highlights poor growth outlook
- ⚠️ Quarterly PAT decline raises sustainability concerns
Company Negative News
- ❌ PAT dropped from 33 Cr. to 14 Cr.
- ❌ EPS remains low relative to market cap
Company Positive News
- ✅ FII and DII holdings increased
- ✅ Debt-free balance sheet provides financial stability
Industry
- 🏦 Industry PE at 33.2, sector moderately valued
- 🏦 Cement sector demand steady but margin pressures persist
Conclusion
🔎 DALBHARAT is not a strong candidate for long-term investment due to weak ROE/ROCE and stretched valuations. Entry should be avoided at current levels; wait for correction near 1,600–1,750 ₹. Existing holders may exit near resistance zones or hold short-term only. Long-term compounding potential is limited unless profitability metrics improve significantly.
Would you like me to extend this into a peer benchmarking overlay comparing DALBHARAT against cement sector peers like Ultratech, Shree Cement, and Ramco Cements to highlight relative valuation comfort zones?
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