HDFC Securities is bullish on Orient Cement has recommended buy rating on the stock with a target price of Rs 105 in its research report dated October 31, 2020.
HDFC Securities' research report on Orient Cement
Orient Cement (ORCMNT) reported a solid 2QFY21 as it reported strong profitability, sharp working capital and debt reduction. While net sales fell 7% YoY to Rs 4.78bn on weak volumes, EBITDA soared 111% YoY to Rs 1.13bn on solid pricing and continued cost reduction. Thus, ORCMNT’s APAT swelled to Rs 348mn vs net loss of Rs 77mn YoY. The company also reduced its working capital requirement, thus bolstering free cash on its books, which it used to reduce its debt by 20% from the Mar-20 level. We continue to like ORCMNT for its continued cost efficiencies and balance sheet focus.
We maintain our BUY with an unchanged target price of Rs 105/share (7x Sep’22E EBITDA).
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