Buy Dalmia Bharat in cement sector: Mehraboon Irani

In a chat with ET Now, Mehraboon Irani, Principal & Head-Private Client Group Business, Nirmal Bang Securities, shares his views on Cement sector.

ET Now: We discussed two groups last time midcap IT and midcap cement and you have mentioned names like Dalmia Bharat and First Source, Dalmia Bharat has been performing stock, First Source has gone from levels of 27 to 35 are you still happy to own them?

Mehraboon Irani: I still say Dalmia Bharat is possibly one of the best pick in the cement pack. The stock has gone up sharply as capacity expansion and assuming the capacity expansion comes into play after 12 months or 15 months.

Assuming it works only at 75%-80% then you compare the market cap of Dalmia Bharat with the market cap say of an Ambuja Cement or an ACC you can argue Ambuja Cement and ACC have a much cleaner balance sheet.

Dalmia has got debt in the books but I will not rule out a dilution coming, a placement coming in Dalmia Bharat virtually every second company today is coming out with the QIP or a placement why not Dalmia Bharat which has got reasons to justify because they have expanded the capacity.

So bring down the debt and equity dilution is possible, the stock may react here and there but at the end of it all I see a Rs 550-700 coming in the next six to nine months may be maximum 12 months.