Religare Institutional Equities has maintained 'Buy' on Orient Cement with target price of Rs 180 with 21.3% upside in its report.
Commenting on the investment rationale, Religare said, ''ORCMNT's topline grew 20% YoY to Rs 3.8 billion driven by 4%/15% volume/realisation growth YoY. On a QoQ basis, realisations soared 11% led by better-than-expected prices in the southern market. Higher realisations pushed up EBITDA/t by Rs 420 YoY (+Rs 190 QoQ) to Rs 785. As with other players, ORCMNT's costs inched up across most line items. Power & fuel costs/t were up 2% QoQ partly due to inventory adjustments, even as freight cost/t remained flat QoQ.
With the strong quarterly beat and better-than- expected realisations in south India, we raise our FY15/FY16/FY17 estimates by 15%/11%/7%. With higher capacity and volumes, ORCMNT should emerge as a key beneficiary of better operating conditions in the south. Maintain Buy.''
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