Orient Cement surges 10%, hits 52-week high on strong Q4 results

Shares of Orient Cement surged 10 per cent to Rs 133.70 on the BSE in intra-day trade on Tuesday after the company’s net profit in the March quarter of the financial year 2020-21 (Q4FY21) more than doubled to Rs 99.88 crore, on the back of healthy operational performance. The company had posted a profit of Rs 44.07 crore in Q4FY20.

The cement maker reported revenue growth of 27.1 per cent year-on-year (YoY) at Rs 832 crore. Earnings before interest, taxes, depreciation and amortisation (EBITDA) margin improved by 530 basis points (bps) YoY and 174 bps quarter-on-quarter (QoQ) to 24.4 per cent.

On account of the outbreak of the Covid-19 pandemic and consequent lockdown imposed by the government, the manufacturing facilities of the company were temporarily shut down during the start of the current year, Orient Cement said, adding that accordingly, the sales volume of the current year are impacted, although cement demand has been progressively recovering over the year with improved prices.

“The company’s stellar performance is backed by a 17.1 per cent YoY jump in sales volumes (1.85 MT) along with strong realisations (up 8.5 per cent YoY) in the company’s key operating regions. The asset utilisation (CU@93 per cent) also remained healthy, leading to a sharp margin expansion as well as robust profitability growth. At current valuations of 8.4x FY23E P/E, 4.8x EV/EBITDA and EV of $46/t on the capacity of 10.5MT (post-expansion), the stock is poised for rerating in our view,” ICICI Securities said in a note.

At 09:48 am, Orient Cement was trading 5 per cent higher at Rs 127.45 on the BSE as compared to a 1.1 per cent rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 4.4 million equity shares having changed hands on the NSE and BSE.