Orient Cement gains on MoU for setting up CGU in Maharashtra

Orient Cement rose 1.44% to Rs 158.80 after the company said that it has entered into a memorandum of understanding (MoU) with Adani Power Maharashtra for facilitating bona fide use of the land for setting up a cement grinding unit in Maharashtra.

The cement maker has identified land ad measuring approximately thirty-five acres in Tiroda, Gondia District, Maharashtra, India, for exploring the possibility of establishing a cement grinding unit (CGU) in the State of Maharashtra.

The company has entered into a non-binding MoU with Adani Power Maharashtra on 23 September 2021 for setting out the understanding for facilitating bona fide use of the land for setting up CGU in the state.

The significant terms of the MoU include providing the said land, of which Adani Power Maharashtra is the lawful lessee, and to obtain required environmental clearances and approvals for subleasing of the said land and use of railway siding facility from the regulatory authorities.

"In the event necessary approvals are not obtained, the parties shall be entitled to terminate this MoU without incurring any liability to each other and on termination of the MoU, the Parties shall be discharged of their obligations, the company said in a statement.

It further said that the MoU shall be effective from the date of execution by the parties for a term of six months and the definitive agreements outlining mutual rights and obligations will be entered in due course of time. The MoU shall cease to exist once the definitive agreements are signed between the parties.

Orient Cement is a part of the C.K. Birla Group. The company's cement plants having aggregate installed capacity of 8 million tonnes per annum (mtpa) are located at Telangana, Maharashtra and Karnataka. The company sells cement under the brand name of 'Birla A1' and 'Birla A1 StrongCrete'.

The company's consolidated net profit surged to Rs 89.46 crore in Q1 FY22 from Rs 25.60 crore in Q1 FY21. Net sales during the quarter increased by 68.4% YoY to Rs 690.90 crore.

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