Orient Cement Ltd. share price target

Background: Orient Cement, a CK Birla group company, formed in 2012 following the demerger from Orient Paper and Industries ltd, is a mid-sized south based cement manufacturer. The company is one of the leading cement manufacturers in India with a capacity of 8 MTPA with clinker manufacturing capacity 5.5 MTPA and captive power capacity of 95MW. The Company operates 3 manufacturing facilities, located at Devapur (3 MTPA) in Telangana, Chittapur (3 MTPA) in...

About the stock: Orient Cement is a mid-sized (8.0 MT) cost-efficient player in cement space. Its cement plants are in Devapur, Telangana (3 MT integrated), Chittapur, Karnataka (3 MT integrated), Jalgaon, Maharashtra (2 MT grinding unit)....

We value OCL at 5.5x FY23E EV/EBITDA and assign a BUY rating to the stock.

We initiate coverage on the stock with a BUY rating and value the company at 5.5xFY23E EV/EBITDA to arrive at a target price of Rs 180/share, implying an upside of 35% from the CMP.

Background: Orient Cement, a CK Birla group company, formed in 2012 following the demerger from Orient Paper and Industries ltd, is a mid-sized south based cement manufacturer. The company is one of the leading cement manufacturers in India with a capacity of 8 MTPA with clinker manufacturing capacity 5.5 MTPA and captive power capacity of 95MW. The Company operates 3 manufacturing facilities, located at Devapur (3 MTPA) in Telangana, Chittapur (3 MTPA) in...

Background: Orient Cement, a CK Birla group company, formed in 2012 following the demerger from Orient Paper and Industries ltd, is a mid-sized south based cement manufacturer. The company is one of the leading cement manufacturers in India with a capacity of 8 MTPA with clinker manufacturing capacity 5.5 MTPA and captive power capacity of 95MW. The Company operates 3 manufacturing facilities, located at Devapur (3 MTPA) in Telangana, Chittapur (3 MTPA) in...

Strong cash flow to aid in significant debt reduction With targeted sales volume of 6 MT for FY22E, we expect the company to generate EBITDA of over ~| 650 crore for FY22E, majority of which would be utilised towards debt repayment. Further, plan to set up another 3.0 MT capacity by FY24E is also in the radar. However, details on its execution will be known later. Besides, de-bottlenecking of 0.5 MT Devapur capacity is...

Company reported 7% Y-o-Y topline growth on the back of higher sales realisation (up 17% Y-o-Y) and 26% Q-o-Q growth primarily on account of higher sales volumes. Management maintained its sales volume guidance to...

Background: Orient Cement, a CK Birla group company, formed in 2012 following the demerger from Orient Paper and Industries ltd, is a mid-sized south based cement manufacturer. The company is one of the leading cement manufacturers in India with a capacity of 8 MTPA with clinker manufacturing capacity 5.5 MTPA and captive power capacity of 95MW. The Company operates 3 manufacturing facilities, located at Devapur (3 MTPA) in Telangana, Chittapur (3 MTPA) in...

Company reported 36% QoQ increase in PAT to `348mn and PAT margins improved to 7.3% in Q2FY21 on the back of higher operating profit. Company's EBITDA per ton stood at `1109 per ton compared to `432 per ton and...