Dalmia BharatLtd (DALBHARAT)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 55.84% aligns ownership with minority shareholders.
• Piotroski F-Score of 8/9 indicates strong balance sheet and improving operational efficiency.
• Debt-to-equity of 0.40 provides financial resilience in a cyclical downturn.
• Scale is evident with quarterly sales of ₹3,506 Cr in the cement market.

Concerns

• Valuation is rich: P/E of 31.25 and P/B of 2.11 against just 3.20% sales growth; Graham number of ₹1,148.23 implies about 73.57% negative margin of safety.
• Weak capital efficiency: ROE of 6.83% and ROCE of 5.58% are poor for a capital-intensive business.
• Free cash flow is negative at ₹-153 Cr, suggesting reported profits are not converting into cash.
• EV/EBITDA of 138.53 is extreme; Altman Z-score of 2.12 sits in the grey zone.

AI Analysis

Let me start with what I admire: a 55.84% promoter holding and a Piotroski score of 8/9 tell me the people running Dalmia Bharat think long-term, and the balance sheet is not stretched, with debt-to-equity at just 0.40. But as Graham said, price is what you pay, value is what you get. At ₹1,958.40, the market is asking ₹37,382 Cr for a business that earned only ₹6.83 on every ₹100 of equity last year. That is poor economics for a supposedly growing cement franchise. Sales growth of just 3.20% – and a five-year revenue CAGR of 6.70% – is hardly enough to justify a P/E of 31.25. The 110.66% profit growth looks impressive until you notice the low base and the fact that free cash flow is negative ₹153 Cr. Earnings quality matters; a business that cannot convert its reported profit into cash needs close scrutiny. My Graham number works out to ₹1,148.23, meaning today's price carries a negative margin of safety of about 73.57%. Even the Altman Z-score of 2.12 sits in the grey zone. ROCE of 5.58% is below what a cement maker needs to cover its cost of capital over a cycle. This is a cyclical business with possibly a decent franchise, but at this valuation I am not a buyer. The 0.45% dividend yield gives me no income while I wait. I would need a much lower price or clear evidence of sustained volume growth and improving returns on capital before investing.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer