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)
- EV/EBITDA: 24.25
- EV/Share: Rs 217
- EV/Sale: 2.94
- Market Cap/ Sale: 2.09
- Debt to Equity: 1.22
- 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.
- 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
|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|
|Date||Exchange||Quantity||Price (Rs)||Value(Rs Crs)||Time|
- 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.
- 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|
|Long Term Debt||1244||1064||45||46|
|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.