Mumbai: Leading brokerages have retained a positive outlook on Dalmia Bharat Ltd after the cement maker reported its June quarter (Q1 FY27) results, even as margins came under pressure due to higher operating costs. Analysts believe the company’s expansion plans, improving demand outlook and long-term growth prospects outweigh the near-term profitability concerns.

Global brokerage firms including Goldman Sachs, Citi and Macquarie reiterated their positive ratings on the stock following the earnings announcement. While they acknowledged that operating margins were lower than expected, they continue to see meaningful upside in the stock over the medium to long term.

Margins disappoint, but demand remains strong

Dalmia Bharat’s first-quarter performance reflected pressure on operating margins, primarily due to increased input costs and other expenses.

Despite the weaker profitability, analysts noted that the company’s revenue performance remained broadly resilient and demand for cement is expected to improve further with continued infrastructure spending and construction activity across the country.

Brokerages maintain positive stance

Brokerages remained optimistic about Dalmia Bharat’s long-term earnings trajectory despite the softer quarter.

According to the review:

  • Goldman Sachs maintained a positive rating, citing confidence in the company’s growth strategy.
  • Citi continued to recommend the stock, highlighting favourable demand trends and capacity expansion.
  • Macquarie also retained its positive view, expecting profitability to improve as cost pressures ease.

Analysts believe the current weakness in margins is likely to be temporary rather than structural.

Target prices indicate upside potential

Brokerage target prices continue to suggest upside from current market levels.

The positive outlook is supported by expectations of stronger cement demand, operating leverage from new capacity additions and improved realisations in the coming quarters. Investors are also expected to benefit if input costs moderate further.

Expansion strategy supports long-term growth

Dalmia Bharat continues to expand its cement manufacturing capacity as part of its long-term growth strategy.

The company has been investing in new plants and capacity additions to strengthen its presence across India, with a focus on increasing market share while maintaining operational efficiency. These investments are expected to support volume growth over the next few years.

Key risks remain

While brokerages remain constructive, they also highlighted certain risks that investors should monitor.

These include:

  • Persistent pressure on fuel and raw material costs.
  • Intense competition in the cement sector.
  • Slower-than-expected demand recovery.
  • Delays in capacity utilisation following expansion projects.

Conclusion

Although Dalmia Bharat’s June-quarter earnings were impacted by lower operating margins, leading brokerages remain optimistic about the company’s long-term prospects. Continued infrastructure spending, capacity expansion and expectations of improved profitability have helped maintain positive ratings and target prices despite the near-term challenges.