India's Orient Cement posts nearly flat Q1 profit on muted demand, lower realisations
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Orient Cement reported a first-quarter profit on Monday that was nearly flat, as muted demand and lower price realisation weighed.
The company's net profit for the quarter ended June 30 inched down 0.8% to 367.1 million rupees ($4.34 million) from 370.3 million rupees a year earlier.
Revenue from operations also fell 15% to 6.96 billion rupees
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KEY CONTEXT
General elections and the summer's extreme heat conditions restricted construction activities in the country, denting sales volumes for cement makers who have also been resorting to price cuts to offset the impact of rising competition.
The company's sales volumes remained nearly flat year-on-year, as per analysts, while its average selling price per tonne of cement also fell in the 4.8%-6% range due to weak pricing.
Local reports suggested that larger peers, including UltraTech Cement and JSW Cement, were in talks to buy the CK Birla-owned company in their race to acquire further market share.
UltraTech Cement also reported first-quarter profit and revenue below estimates.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts' sentiment
months) months)
RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div
DA growth % growth % rating* analysts price yield
target** (%)
Orient Cement 28.84 12.66 8.73 24.50 Hold 7 1.51 0.66
JK Lakshmi Cement 17.63 8.71 9.38 17.99 Buy 11 0.92 0.34
ACC 21.44 11.43 5.98 3.11 Buy 19 0.87 0.30
Dalmia Bharat 30.82 11.93 7.50 25.09 Buy 27 0.88 0.50
* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
* Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT APRIL-JUNE STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 83.8387 Indian rupees
