Mehabe score: 6 G Factor: 6 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 6 and Piotski score of 7.
Description
Orient Cement Ltd is primarily engaged in the manufacture and sale of Cement and its manufacturing facilities at present are located at Devapur in Telangana, Chittapur in Karnataka and Jalgaon in Maharashtra.#
Main Points
Product Portfolio
The company produces 2 kinds of cement i.e. Pozzolana Portland Cement (PPC) & Ordinary Portland Cement. They’re marketed under the brand name of Birla A1 – Birla A1 Premium Cement and Birla A1 StrongCrete.#Site:ORIENTCEMMain Symbol:ORIENTCEM
Stock trades at 144.0, above its 50dma 130.28. It also trades above its 200dma 102.74. The stock remains bullish on techicals
The 52 week high is at 151.45 and the 52week low is at 56.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has delivered good profit growth of 27.99% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 23.07%
Weakness
– The company has delivered a poor sales growth of 9.71% over past five years.
– has a low return on equity of 10.44% for last 3 years.
Competition
– The industry trades at a mean P/E of 16.4x. The Ramco Cement trades at the industry’s max P/E of 32.43x. ORIENTCEM trades at a P/E of 13.8x
– Industry’s mean G-Factor is 5.6 while the mean Piotski score is 8.0. ORIENTCEM has a G-Factor of 6 and Piotski scoreof 7.
– Average 1 month return for industry is 13.7%. The max 1- month return was given by Sagar Cements: a return of 29.28 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 832.0 cr compared to Rs 655.0 cr for period ended Mar 2020, a rise of 27.0%
Operating Profits reported at Rs 203.0 cr for period ended Mar 2021 vis-vis 125.0 for period ended Mar 2020 .
Operating Margins expanded 531.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 4.88 compared to Rs 2.63 for previous quarter ended Dec 2020 and Rs 2.15 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2324.0 cr for period ended Mar 2021 vis-vis sales of Rs 2422.0 cr for the period ended Mar 2020, a fall of 4.2%. The 3 year sales cagr stood at 1.5%.
Operating margins expanded to 24.0% for period ended Mar 2021 vis-vis 16.0% for period ended Mar 2020, expansion of 800.0 bps.
Net Profit reported at Rs 214.0 cr for period ended Mar 2021 vis-vis sales of Rs 87.0 cr for the period ended Mar 2020, rising 59.3%.
Company recorded a healthy Net Profit CAGR of 69.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 714.0 cr for period ended Mar 2021 vis-vis Rs 292.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 108% on a 1 Year basis vis-vis a return of 8% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is 148% vis-vis a compounded profit growth of 69% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.09% vis-vis 1.48% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 36.46% vis-vis 36.02% for Dec 2020
Conclusion
– has reduced debt.
– has delivered good profit growth of 27.99% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 23.07% – The company has delivered a poor sales growth of 9.71% over past five years.
– has a low return on equity of 10.44% for last 3 years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 130.28 and is trading at 144.0, thus bullish price action wise.
