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OCL India looks undervalued: Ashish Chugh
Investment Analyst, Ashish Chugh is of the view that OCL India is looking undervalued compared to the peer group. This company has the largest cement plant, which is located in Orissa, which is supposed to be a cement deficit region. The company also has besides limestone mines access to coal mines and captive power.
Investment Analyst, Ashish Chugh is of the view that OCL India is looking undervalued compared to the peer group.
Chugh told CNBC-TV18, "OCL India is an efficiently managed cement plant. This company has got a clean balance sheet. It is one of the most undervalued and under-researched stocks in the cement sector. Even many analysts have not heard of this stock. This company has the largest cement plant, which is located in Orissa, which is supposed to be a cement deficit region. The company also has besides limestone mines access to coal mines and captive power."
He further added, "This company has been expanding its capacity. If you look at the financials, sales for FY09 is Rs 1,120 crore, profit after tax (PAT) is Rs 116 crore. Its Q1 sales are of Rs 350 crore with the PAT of Rs 57 crore. Company paid tax of Rs 27 crore in Q1 alone. So you have a company with a small equity of Rs 11.5 crore and a market cap of Rs 630 crore paying tax of Rs 27 crore in one quarter and making a PAT of Rs 57 crore in one quarter and trading at a price to earning multiple of about 4.5. This stock looks undervalued compared to the peer group."
Disclosure: I don't hold any stock of OCL India Ltd.
