Forecast

Buy or Sell: Orient Cement Share Price Target 2024, 2025, 2030 Long-Term Prediction

HP Jinjholiya

24 August 2024

Today, we are going to estimate the Orient Cement Share Price Target 2024 to 2050 Long Term Prediction. Orient Cement is listed on the NSE under the symbol “ORIENTCEM” and on the BSE with the code “535754“. let’s analyze the future of Orient Cement shares as well, including whether it’s a good time to buy or sell them today.

Additionally, we will also take into analysis Orient Cement Share Recommendations from various brokerage firms, including Target’s High Price, Target’s Low Price and Recommendation at the end of the article.

Profile of Orient Cement

Keep an eye on Orient Cement’s share price today with real-time updates, and examine its performance on the stock market through comprehensive charts that display the fluctuations in Orient Cement’s stock price.

Orient Cement Share Price Today

An effective method for evaluating the Orient Cement share price Target is by examining research reports and analyses conducted by reputable financial institutions and brokerage firms. The latest research reports are available on Orient Cement.

Orient Cement Share Price Target

The financial services firm HDFC Securities published the latest research report on Orient Cement’s Share Price Target, assigning a ‘Sell’ rating with a share price target of Rs. 205 from its current market price of Rs. 277 as of 06 Feb 2024.

Orient Cement’s share price target has been revised, maintaining a REDUCE rating with a revised target price (TP) of INR 205/share, based on a 7.5x Mar-26E EBITDA. The company experienced a decline in cement volume by 3% YoY in Q3FY24 due to weak demand, especially in the B2C segment.

However, there was a rebound of 7% QoQ (+5% YoY) in Net Sales Realization (NSR). Operational expenses rose by 3% QoQ primarily due to increased fixed and freight costs, which moderated margin recovery. Despite this, unitary EBITDA increased by INR 220/MT QoQ to INR 628/MT (up INR 200/MT YoY).

Management expects a 5% YoY volume growth in Q4 to reach 1.8 million MT, although January sales were weak. Plans for expansion include commissioning a planned brownfield 2/3 million MT clinker/cement expansion in Chittapur by the end of FY26, with a capex of INR 15 billion.

In Q3FY24, Orient Cement missed EBITDA estimates by 8/10% respectively, attributing it to weak volumes affected by state elections, resulting in a 2/3% QoQ/YoY volume decline. Trade sales were particularly weak in Telangana (down 29% YoY) and Maharashtra. Utilization stood at 66% compared to 67/67% QoQ/YoY. While volumes remained weak, NSR rebounded by 7% QoQ (+5% YoY).

Management’s outlook includes expecting a 5% YoY volume growth in Q4 to 1.8 million MT despite weak January sales. They anticipate stable realizations in January and aim to capitalize on renewable energy sources to drive margins, with plans to commission expansions in Chittapur and MP, although these have faced delays due to pending government clearances.

The company’s expansion plans have led to a revision in capex estimates for FY25/26E, and considering the weak Q3FY24 results, EBITDA estimates for FY24/25/26E have been reduced by 9/9/10%. However, the target price has been revised upwards to INR 205/share, reflecting the deferred capex plans.

To analyze the Orient Cement Share Price Target prediction, I will employ technical analysis and machine learning models, specifically focusing on chart patterns, market trends, and historical performance data.

About Orient Cement Company

Orient Cement, a prominent company in India’s cement industry, is recognized for its commitment to sustainability and innovation. Its journey, marked by continuous growth and embracing change, reflects its commitment to responsible and sustainable practices.

The company focuses on creating long-term value for all stakeholders, including customers, investors, business partners, and the community. They emphasize sustainability through environmentally friendly products, like their low carbon footprint cement, Birla.A1 OrientGreen. Orient Cement also adopts advanced technology and digital solutions to enhance efficiency and reduce environmental impact.

Their inclusive corporate culture and customer-centric approach drive their success in meeting diverse construction needs. They are part of the CK Birla Group, a well-established conglomerate with a global presence, further reinforcing their robust market position. Orient Cement’s approach to business reflects a balance of innovation, responsibility, and sustainable growth, catering to the evolving needs of modern construction.

Strengths–

Strong Revenue Growth: Orient Cement has demonstrated consistent revenue growth over the years. The Total Revenue has increased from ₹23,224,980 in 2020 to ₹31,710,117 in the trailing twelve months (TTM) period, indicating robust top-line performance.

Healthy Gross Profit Margin: The company maintains a healthy gross profit margin, which is the difference between revenue and the cost of goods sold. With Gross Profit reaching ₹26,607,713 in the TTM period, Orient Cement exhibits operational efficiency in managing its production costs.

Positive Operating Income: Orient Cement generates positive operating income, indicating its ability to cover operating expenses and generate profits from core operations. The Operating Income has shown an upward trend, reaching ₹3,002,093 in the TTM period.

Weaknesses–

High Operating Expenses: Despite positive operating income, Orient Cement faces substantial operating expenses. The Operating Expense has increased consistently over the years, indicating potential inefficiencies or cost management challenges.

Negative Net Interest Income: The company experiences negative net interest income, implying higher interest expenses compared to interest income. This trend suggests a need for effective debt management strategies to lower interest costs.

Reduced Working Capital: Orient Cement has experienced a decline in working capital, indicating potential liquidity constraints or difficulties in managing short-term obligations. A negative working capital could impact the company’s ability to meet its financial obligations promptly.

Opportunities–

Investment in Capital Expenditure: Despite fluctuations, Orient Cement has been investing in capital expenditure, indicating opportunities for expansion, modernization, and technological advancements to enhance productivity and competitiveness.

Growth Potential in Infrastructure Projects: India’s focus on infrastructure development presents significant growth opportunities for cement companies like Orient Cement. Participation in government projects and infrastructure initiatives can drive demand for cement products.

Strategic Debt Management: With prudent debt management strategies, Orient Cement can optimize its capital structure, reduce interest expenses, and improve profitability. Refinancing debt at favorable terms or reducing reliance on debt could enhance financial flexibility.

Threats–

Volatility in Raw Material Prices: Orient Cement faces the risk of volatility in raw material prices, including limestone and coal, which are essential for cement production. Fluctuations in input costs could impact profitability if not adequately managed.

Competitive Market Landscape: The cement industry in India is highly competitive, with several established players competing for market share. Intense competition could exert pressure on pricing and margins, affecting Orient Cement’s financial performance.

Regulatory and Environmental Challenges: Compliance with regulatory standards and environmental regulations poses challenges for cement manufacturers. Adhering to emission norms, obtaining environmental clearances, and managing regulatory compliance costs are crucial considerations for Orient Cement.

Peer Comparison of Orient Cement

How to Buy Orient Cement Share

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I would like to remind you that I am not authorized by SEBI to provide any financial advice or recommendations. As you know, Share price prediction is not an exact science, That’s why I am conducting in-depth research and using different AI tools to predict share prices.

Disclaimer– These Share Price Targets for “Orient Cement Share Price Target” are only provided for informational purposes. It does not constitute a recommendation to buy, sell, or hold Orient Cement stock. Investors should conduct their research and analysis and consult with financial experts before making any investment decisions— Sharedhan.com