The share price of Dalmia Bharat jumped over 5 percent to hit a 52-week high on Friday after the company reported strong earnings for the second quarter of fiscal 2021.
The stock gained as much as 5.6 percent to hit a high of Rs 925.40 apiece on the BSE.
The company on Thursday reported over six-fold increase in its consolidated net profit at Rs 232 crore for the quarter ended September 2020, helped by higher sales volume. The company had posted a net profit of Rs 36 crore during the same quarter last year.
The company’s revenue from operations during Q2FY21 increased 7.78 percent to Rs 2,410 crore from Rs 2,236 crore, YoY. Its sales volume was 4.80 million tonnes during the quarter, up 7.38 percent, as against 4.47 million tonnes.
“The company achieved a volume growth of 7 percent YoY on the back of demand from rural segment and pick-up in government's infrastructure and low-cost housing projects. The eastern states continued to outperform with green-shoots of demand revival visible in south in the later part of the quarter," the company said in a regulatory filing.
Total expenses were down 8.23 percent at Rs 2,083 crore as against Rs 2,270 crore in the year-ago period.
During the quarter, Dalmia Bharat witnessed a seasonal weakness of cement prices during the quarter, especially in eastern region, it added. The company paid back all its debt during the quarter, leaving only Rs 87 lakh of net debt on its balanace sheet having retired Rs 246 crore.
During the reporting period, the company acquired Murli Industries and also finished the plant integration with installed capacity of 3 million tonnes and also commissioned the 3 million tonnes clinker line in Odisha.
Global brokerage firm Morgan Stanley said that the company’s volumes up 7 percent surprised positively. However, realisations were weaker than expected but profitability was ahead of estimates.
Dalmia Bharat’s good cash flow led to net debt reduction in H1, the brokerage said. It maintained an 'Underweight' rating on the stock with a target price of Rs 850 per share.
At 9:55 am, the shares of Dalmia Bharat were trading 3.61 percent higher at Rs 907.85 apiece on the BSE as compared to a 0.60 percent gain in the benchmark Sensex.