Centrum Broking has given a buy rating to Orient Cement with a target price of Rs 84. the share price moved down by 0.92% from its previous close of Rs 70.40. The stocks' last traded price is Rs 69.75.
Orient Cement Ltd., incorporated in the year 2011, is a Small Cap company (having a market cap of Rs 1427.94 Crore) operating in the Cement sector.
Financials
For the quarter ended 30-06-2020, the company reported a Standalone sales of RS 410.36 crore, down 37.30% from last quarter sales of RS 654.52 crore and down -40.34% from last year same quarter sales of Rs 687.79 crore. The company reported net profit after tax of Rs 25.60 crore in latest quarter.
Investment Rationale
Orient Cement currently trades at a replacement cost of RS 3.0 bn/mt lower due to the reaction to the weakness followed by the COVID-19 pandemic. The brokerage has assigned replacement cost of Rs 3.3 bn/mt March 2022E capacities to arrive at a fair value of Rs 84/sh (earlier Rs 71/sh). The discount is still higher (replacemnet cost of Rs 7.5bn/mt) due to risk of regional concentration. New capacity addition is on hold helping ORCMNT to shape ist balance sheet better. At this target price the stocks trade at an EV/EBITDA of 5.8x FY22 earnings.
Promotor/FIIs Holdings
Promotors heldn37.4% stake in the company as of June 30, 2020, while FIIs held 3.1%, DIIs 26.5% and public and other 33%.
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