Buy Orient Cement; target of Rs 155: HDFC Securities

HDFC Securities is bullish on Orient Cement has recommended buy rating on the stock with a target price of Rs 155 in its research report dated May 03, 2023.

Orient reported 20/6% QoQ/YoY volume recovery in Q4FY23 (flattish five-year CAGR) on healthy non-trade demand. Unit EBITDA recovered ~INR 180 per MT QoQ on op-lev gains to INR 812 per MT (it reported low employee and other expenses despite healthy volume growth QoQ). Orient has changed its Capex plan—it will add a 3mn MT brownfield IU in Chittapur (expected by H1FY26E). The 10MW WHRS in Chittapur will get operational in Q1FY24 and boost margin FY24 onwards. Orient faces increased regional competition from recent expansions by big players. The planned Chittapur expansion should stretch gearing, in our view.

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