Scrip Watch

Orient Cement Ltd

Scrip Sanctuaries for protection from the wildlife in this jungle of Indian Equities

Orient Cement Ltd

Orient Cement Ltd
Cement and Cement Products

FV – Re 1; 52wks H/L – 198/128; TTQ – 15000; CMP (May 12, 2016) – Rs 155;

Market Cap – Rs 3167 Crs

Standalone Financials and Valuations for FY16 (Amt in Rs Crs unless specified)


Equity Capital

Net worth

Long Term
Debt

Total
Sales
PAT
BV
(Rs)

EPS (Rs)

P/E

Industry
P/E

P/BV

Promoter’s
Stake
20.49 1016 1244 1509 62 50 3.03 51.32 15.97 3.11 37.5

 

Valuation Parameters

  1. EV/EBITDA: 24.25
  2. EV/Share: Rs 217
  3. EV/Sale: 2.94
  4. Market Cap/ Sale: 2.09
  5. Debt to Equity: 1.22
  6. RoI: 6.1 %
  • In September 2015, Orient Cement commissioned its new plant located near Chittapur, District Gulbarga, Karnataka and has an installed capacity of 3 million tonnes per annum (MTPA). The company now has a total capacity of 8 MT including the recently commissioned capacity in Karnataka. The company had invested Rs 2000 Crs in the Karnataka plant.
  • It sells 60% of its cement production in Maharashtra and close to 40% in Telangana. Nearly 80% of its sales are in the trade segment with a focus on rural housing.
  • Orient Cement has set a target of achieving 15Mt/yr production capacity by the end of 2020. The company is now looking at acquiring a few production plants with 2Mt/yr and 3Mt/yr production capacities in eastern India.

Recent Updates

  • The Company’s fourth-quarter net profit fell 77% to Rs 19 Crs from Rs 85 Crs in the same period last year, largely due to a sharp fall in realisation. Overall realisation was down 17%to Rs 3228 per tonne.
  • The ramp up of production at the new plant in Karnataka’s Gulbarga district is progressing well and helped achieve a volume growth of 40%.
  • The capacity utilisation has touched 44% at new plant, while it was 86% at the old plant. Overall capacity utilisation stood at 74%. The company targets 60% capacity utilisation at new plant for the coming year and 86-88% for the old plants.
  • For Q4 of FY 16, the company did a total volume of nearly 13.9 lakhs tonne. The company is targeting sales volume of 14.5-15 lakhs tonnes in coming quarters and also looking at higher usage of pet coke as cement plant stabilise.
  • Given the Debt to equity at 1.2, the company is comfortable with it and has no plan to bring it down in current year.
  • Remuneration paid to MD and CEO of the company for FY 16has exceeded the limit prescribed under section 197 read with the Schedule V of the Companies Act.
  • Aiming for 14.5-15 lakh tonne sales: Orient Cement

Bulk Deals

Date Company Client Transaction Quantity Traded Price (Rs)
15-May-2014 Orient Cement (NSE) Jhunjhunwala Rakesh Radheyshyam BUY 1710000 53.10
15-May-2014 Orient Cement (NSE) Nirmal Bang Securuties Pvt Ltd Error Account BUY 1050000 52.00
15-May-2014 Orient Cement (NSE) Nirmal Bang Securuties Pvt Ltd Error Account SELL 1050000 52.00

 

Block Deals

Date Exchange Quantity Price (Rs) Value(Rs Crs) Time
05-01-2016 BSE 500000 152.50 7.63 10:50
23-11-2015 NSE 350000 165.00 5.78 15:26
23-11-2015 NSE 400000 165.00 6.6 15:05
29-05-2015 BSE 970000 178.00 17.27 11:35
29-05-2015 NSE 1000849 178.00 17.82 11:35
22-05-2015 BSE 444207 185.00 8.22 13:58
22-05-2015 BSE 559167 185.00 10.34 13:57
23-01-2015 NSE 500012 188.95 9.45 13:33

 

Overview:

  • The company started its operations in 1982 and is engaged in the manufacture and sale of cement.
  • The Company’s manufacturing facilities are located at Devapur in Telangana and Jalgaon in Maharashtra.
  • The Company’s products include Birla A1 Premium Cement, Birla A1 Premium Cement-OPC 53 Grade and Birla A1 Premium Cement-OPC 43 Grade. The Company’s Greenfield cement plant, located near Chittapur, District Gulbarga, Karnataka, has an installed capacity of approximately three million tons per annum (MTPA).
  • The Company is part of the CK Birla Group, which operates in three industry clusters, including technology and automotive, home and building, and healthcare and education.
  • The Company operates through a network of over 40 offices.
  • Orient Cement operates largely in rural and semi-urban markets in Telangana and Maharashtra. Its target customer is the independent house builder in these markets. Therefore, dependence on the organised real-estate sector is small.

Management:

  • Mr C K Birla is the Chairman
  • Mr Desh Deepak Khetrapal is the MD and the CEO

 

Major Non – Promoter Holdings:

Sr No.  Non-Promoters % Stake
1 UTI-MID Cap Fund 1.22
2 Franklin Templeton Mutual Fund A/C Franklin India High Growth Companies Fund 1.81
3 Reliance Capital Trustee Co. Ltd.-A/C Reliancegrowth Fund 3.53
4 Reliance Capital Trustee Co. Ltd.-A/C Reliancesmall CAP Fund 1.5
5 ICICI Prudential Value Discovery Fund 2.03
6 Government Pension Fund Global 1.45
7 India Capital Fund Limited 1.9
8 Life Insurance Corporation of India 2.06
9 National Insurance Company Ltd. 2.37
10 ICICI Prudential Life Insurance Company Ltd. 1.61
11 HDFC Standard Life Insurance Company Limited 1.79
12 Jhunjhunwala Rakesh Radheshyam 1.22
13 Sri Govinddeo Educational Institute 1.47
14 Shri Venkateshwara Educational Institute 1.39
15 Rukmani Birla Educational Society 1.69
16 Shri Jagannath Educational Institute 1.55
17 Birla Institute of Technology and Science 1.72

 

Standalone Financial Trends ~ Amt in Rs Crs

  FY 16 FY 15 FY 14 FY 13
Equity Paid Up 20.49 20.49 20.49 20.49
Networth 1016 976 829 757
Long Term Debt 1244 1064 45 46
Total Sales 1509 1547 1430 1502
PAT 62 195 101 162
EPS (Rs) 3.03 9.52 4.93 7.91
Book Value (Rs) 50 48 40 37

 

  • The costs related to the commissioning/stabilisation of the new integrated unit at Chittapur (Karnataka) has affected the firm’s operating and net profit numbers in the last two quarters of FY16.
  • Increase in long term borrowing in FY 15 was to finance the new plant at Karnataka.

 

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