Dalmia Bharat (DALB.NS): Weaker volumes and costs weigh on performance

Nomura notes that Dalmia Bharat's 2QFY27 EBITDA of INR4.9bn missed its forecast and Bloomberg consensus by 10% and 16%, respectively, on weaker-than-expected volumes and cost pressures. Grey cement volumes rose 3% y-y, blended realisations fell 2% q-q, and EBITDA/t declined INR365/t q-q to INR694/t. Management expects profitability to improve in 3Q, although petcoke prices imply a further INR75/t cost impact; Nomura forecasts EBITDA/t to rise about INR30/t q-q to INR725/t. Factoring in lower capacity utilisation as the company shifts focus from volumes to value, Nomura cuts FY27F/28F/29F volume estimates by around 5% and EBITDA estimates by 14%/8%/7%, lowers its target EV/EBITDA multiple to 11.0x, and trims its target price by 11% to INR2,230 from INR2,500. It maintains Buy, implying about 37% upside.