Orient Cement on a high

Orient Cement is a buzzing stock today. From its close of Rs.162.25, it opened almost 4% higher at Rs.167.70 and went to hit a 3-year high at Rs.171.90, on the back of an over 1.5 times rise in volumes.

The stock posted an excellent set of numbers for Q1Fy22, mainly on its EBITDA and net profit front.

Its revenue for the quarter declined 17% (QoQ) and down 17% (YoY) at Rs.690 while EBITDA fell 8.5% (QoQ) to Rs.185 crore. But its EBITDA margins rose to 27.25% from 24.52% QoQ as well as YoY. This is due to better control of variable cost of power & fuel, packing, freight & forwarding, and other expenses, while fixed expenses like Finance cost, manpower and Depreciation remaining constant QoQ.

PBT is at Rs. 137 cr against Rs. 153 cr, QoQ, with PAT at Rs. 90 cr against Rs. 100 cr QoQ. Q1 EPS is at Rs.4.37 against Rs. 4.88 QoQ, while it was at Rs. 10.45 for FY 21.

In our Little Gems section, we have said today morning, “Stock is seen the most under priced stock, in booming Cement sector, which is ruling at an EV/MT of US$ 66, with M Cap at Rs.3 ,320 cr and Debt of Rs. 680 cr. Company has MAT credit of Rs. 126.64 cr as at 31-3-21 and hence will have an effective tax outgo of rs. 17.50% for FY22. EPSe for FY 22 is seen at Rs. 20, making stock to rule at a PE of 8x seen lowest in mid sized category, having potential to rise by 75% in MT.”