04 August 2021 HSIE Results Daily

HSIE Results Daily

Contents
Result reviews
 Dabur: Dabur’s Q1 performance was inspiring with a beat in revenue,
volume and EBITDA. Revenue growth was at 32% YoY (HSIE 22%), 2-year
CAGR at 7%. Domestic revenue/volume growth were at 35/34% YoY, 2-year
CAGR at 12/10% vs. Britannia’s 12/13%, Nestle’s 8/6%, Marico’s 7/2%,
Colgate’s 4/0%, Emami’s 3/2% and HUL’s 2/0%. Dabur’s
healthcare/HPC/F&B grew 30/26/80% YoY (vs. +29/-15/-34% in Q1FY21 and
+23/+33/+28% in Q4FY21). The international business saw continued
recovery, growing 29% YoY. EBITDA growth was at 33% YoY (HSIE 23%),
while EBITDA margin was in line at 21%. We remain positive on Dabur's
ability to deliver strong revenue growth, led by its positioning as a natural
and trusted brand along with its power brands strategy. We maintain our
EPS estimates. We increase our target multiple to 50x P/E (45x earlier) on
Jun-23E to factor in its consistent outperformance vs peers and result-
oriented renewed strategies. Our target price is INR 625. Maintain ADD.

 Godrej Properties: Godrej Properties Ltd (GPL) reported an operationally

weak Q1FY22 with presales volume of 0.8msf (-69.3%/-81.5% YoY/QoQ) and
value of INR 4.9bn (-67.5%/-81.1% YoY/QoQ). Despite the weak
performance, we expect GPL to register presales growth in FY22, given (1)
near normalisation of sales momentum in June/July-21, (2) robust launch
pipeline (13.3 msf), (3) strong balance sheet with surplus cash of ~INR 35bn,
and (4) well recognised brand positioning. We roll forward our valuation to
Jun-23, and increase our target price to INR 1,500/sh (earlier INR 1,323/sh) to
account for surplus cash (INR 35bn) deployment in new land acquisitions.
However, given punchy valuations, we reiterate REDUCE, as all the
positives seem fairly priced in.

 Alkyl Amines: We maintain SELL on Alkyl Amines with a price target of

INR 3,200 (WACC 10%, terminal growth 5%). The stock is currently trading
at 55.6x FY23E EPS. We believe that the current valuation already factors in
positives from the potential volume growth, post doubling of the
acetonitrile plant capacity, and ~40% additional capacities of the aliphatic
amines plant. The rising raw material prices are looking as a dampener and
can put pressure on the margins in FY22. EBITDA/APAT were 5/1% below
our estimates, owing to higher-than-expected raw material costs, offset by
lower-than-expected depreciation, higher-than-expected other income, and
a lower-than-expected tax outgo.

 Kajaria Ceramics: We maintain our BUY rating on Kajaria Ceramics (KJC)

with an unchanged target price of INR 1,130/share (19 Jun’23E consolidated
EBITDA). We continue to like KJC for its superior margin in the tiles
segment (function of its robust distribution and cost controls) and its fast
expansion in its bathware and ply businesses. In Q1FY22, KJC’s
consolidated revenue/EBITDA/APAT fell by 41/58/66% QoQ to INR
5.62/0.80/0.43bn respectively (with the lockdown impacting consolidated
HSIE Research Team
revenue). Its QoQ margin compression is much lower vs peers. With
[email protected]
demand recovering June onwards, tiles prices have increased by ~3% in
July, boosting cost pass-through and, hence, margin should rebound. KJC’s
upcoming capacities will continue to support its market share,
strengthening its leadership position in the domestic market.

HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
 Orient Cement: We maintain our BUY rating on Orient Cement with a
revised target price of INR 187/share (7.5x Jun’23E consolidated EBITDA). In
line with the performances of its peers in the south, Orient reported strong
margin expansion during Q1FY22. Solid pricing gains across the south and
west regions offset the impact of 26% QoQ volume decline and rising fuel,
diesel and packing costs. Thus, unitary EBITDA expanded 25% QoQ to INR
1368/MT (Orient’s best-ever margin) and moderated the profit decline. In
Q1FY22, its revenue/EBITDA/APAT declined 17/8/10% QoQ to INR
6.91/1.86/0.9bn respectively. We continue to like the company due to a
healthy demand outlook, its comfortable balance sheet, and its 3mn MT
expansion plan.

Page | 2
 HSIE Results Daily

Dabur
Outperformance continues; strategies playing out
ADD
Dabur’s Q1 performance was inspiring with a beat in revenue, volume and CMP (as on 3 Aug 2021) Rs 614
EBITDA. Revenue growth was at 32% YoY (HSIE 22%), 2-year CAGR at 7%. Target Price Rs 625
Domestic revenue/volume growth were at 35/34% YoY, 2-year CAGR at 12/10%
NIFTY 16,131
vs. Britannia’s 12/13%, Nestle’s 8/6%, Marico’s 7/2%, Colgate’s 4/0%, Emami’s
3/2% and HUL’s 2/0%. Dabur’s healthcare/HPC/F&B grew 30/26/80% YoY (vs. KEY
+29/-15/-34% in Q1FY21 and +23/+33/+28% in Q4FY21). The international OLD NEW
CHANGES
business saw continued recovery, growing 29% YoY. EBITDA growth was at Rating ADD ADD
33% YoY (HSIE 23%), while EBITDA margin was in line at 21%. We remain
Price Target Rs 566 Rs 625
positive on Dabur's ability to deliver strong revenue growth, led by its
positioning as a natural and trusted brand along with its power brands FY22E FY23E
EPS %
strategy. We maintain our EPS estimates. We increase our target multiple to 0% 0%
50x P/E (45x earlier) on Jun-23E to factor in its consistent outperformance vs
peers and result-oriented renewed strategies. Our target price is INR 625. KEY STOCK DATA
Maintain ADD.
Bloomberg code DABUR IN
▪ Healthcare/oral care/hair care outperform: Net revenue grew by 32% YoY (-
No. of Shares (mn) 1,768
13% in Q1FY21 and +25% in Q4FY21), ahead of our expectation of 22% YoY
MCap (Rs bn) / ($ mn) 1,086/14,619
growth. Domestic business grew by 36% YoY with 34% YoY volume growth.
Despite a heavy base, health supplements/digestives/OTC/ethical were up 6m avg traded value (Rs mn) 1,505
25/16/52/51% YoY. In HPC, oral care/hair oils/shampoo/home care/skin and 52 Week high / low Rs 62/471
salon saw growth of 21/38/41/31/-5%. Food saw 18% YoY growth, while
beverages was up 85% on a low base and in the peak season. Dabur saw STOCK PERFORMANCE (%)
strong market share gains in oral care, hair oils, home care, Chyawanprash
3M 6M 12M
and juices. International revenue grew by 29% YoY with 34% YoY cc growth.
▪ Maintains EBITDA margin in high inflation: GM contracted by 131/64bps Absolute (%) 13.2 17.1 20.3

YoY/QoQ (-10bps in Q1FY21 and -35bps in Q4FY21) to 48%. It was impacted Relative (%) 1.7 10.7 (22.5)
by steep raw material inflation and restricted price hikes (~3%). Employee/
A&P/other expenses grew by 15/29/34% YoY. Dabur, through its cost SHAREHOLDING PATTERN (%)
savings initiatives, saved INR 250-270mn in Q1FY22. EBITDA margin Mar-21 Jun-21
expanded 10bps YoY (+91bps in Q1FY21 and +5bps in Q4FY21) to 21.1% (in
Promoters 67.87 67.36
line with HSIE). EBITDA grew by 33% YoY (HSIE 23%). PBT grew by 34%
YoY while PAT grew by 28% YoY on increase in tax rate. FIs & Local MFs 5.34 4.66

 Call takeaways: (1) Urban will see higher growth vs. rural in FY22 (due to FPIs 19.77 20.59
the low base), but rural will continue to outpace urban in the medium term. Public & Others 7.51 7.39
(2) The company has introduced real juice SKUs at INR 10/20 for the rural
Pledged Shares 0.00 0.00
market, which is seeing good traction. (3) The company has experienced
high inflation and taken 3% price hike. (4) No plans to take a price hike in Source : BSE
Q2, but may take in Q3 if inflationary pressure continues. (5) Capex of INR Pledged shares as % of total shares
5.5bn over the next three years for the Indore plant. (6) International
business will deliver double-digit growth in a stable environment. (7) It Varun Lohchab
expects A&P spend at 9% of sales in the next 2-3 years. (8) It doubled its e- [email protected]
commerce sales, which now contribute towards 8% of domestic sales. +91-22-6171-7334
Quarterly/Annual Financial summary
Naveen Trivedi
YE Mar (INR mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) FY21 FY22E FY23E FY24E
Net Sales 26,115 19,800 31.9 23,368 11.8 95,617 108,431 119,232 132,317
[email protected]
EBITDA 5,520 4,166 32.5 4,425 24.8 20,027 23,161 26,274 29,605 +91-22-6171-7324
APAT 4,373 3,418 28.0 3,778 15.8 16,934 19,185 21,516 24,426
Diluted EPS (INR) 2.5 1.9 28.0 2.1 15.8 9.6 10.9 12.2 13.8 Saras Singh
P/E (x) 64.1 56.6 50.4 44.4 [email protected]
EV / EBITDA (x) 52.2 44.9 39.3 34.6 +91-22-6171-7336
RoCE (%) 44.3 51.3 55.2 61.9
Source: HSIE Research

Page | 3
 HSIE Results Daily

Godrej Properties REDUCE

CMP (as on Aug 3, 2021) Rs 1,323
Positives priced in
Target Price Rs 1,500
Godrej Properties Ltd (GPL) reported an operationally weak Q1FY22 with
presales volume of 0.8msf (-69.3%/-81.5% YoY/QoQ) and value of INR 4.9bn (- NIFTY 16,130
67.5%/-81.1% YoY/QoQ). Despite the weak performance, we expect GPL to
register presales growth in FY22, given (1) near normalisation of sales KEY
OLD NEW
CHANGES
momentum in June/July-21, (2) robust launch pipeline (13.3 msf), (3) strong
Rating REDUCE REDUCE
balance sheet with surplus cash of ~INR 35bn, and (4) well recognised brand
positioning. We roll forward our valuation to Jun-23, and increase our target Price Target Rs 1,323 Rs 1,500
price to INR 1,500/sh (earlier INR 1,323/sh) to account for surplus cash (INR FY22 FY23
35bn) deployment in new land acquisitions. However, given punchy EPS cha. (%)
1.1 0.6
valuations, we reiterate REDUCE, as all the positives seem fairly priced in.
 Q1FY22 financial highlights: Revenue: INR 862mn (+19%/-80% YoY/QoQ, KEY STOCK DATA
43% miss). EBITDA: INR (635) mn (INR (535)/ (1,541) mn in
Bloomberg code GPL IN
Q1FY21/Q4FY21, vs INR (776) mn est.). RPAT/APAT: INR 170mn (INR
(202)/371 mn Q1FY21/Q4FY21), vs an estimated loss of INR 73mn. Presales No. of Shares (mn) 278
in June-21 have picked up and were around INR 3.3bn (contributing 66% to MCap (Rs bn) / ($ mn) 461/6,210
Q1FY22 sales); July-21 saw further recovery with presales of ~INR 5bn.
6m avg traded value (Rs mn) 1,331
 Weak presales; new vision for Mumbai; focus on top cities to continue:
52 Week high / low Rs 1,698/820
The presales value for the quarter came in at INR 4.9bn (-67.5/-81%
YoY/QoQ) and volume stood at 0.8msf (-69x/-81.5% YoY/QoQ). For FY22,
STOCK PERFORMANCE (%)
the GPL expects to surpass FY21 presales (INR 67bn), given a robust launch
pipeline of 13.3msf. Collections for the quarter stood at INR 12bn (INR 4.5bn 3M 6M 12M
YoY). Laying higher growth emphasis on the MMR market, GPL has Absolute (%) 26.7 19.5 80
rejigged its management team with a new CEO at the helm. A good chunk
Relative (%) 15.2 13.1 37.2
of surplus growth capital will get deployed in Mumbai. The Worli project
approval is expected to be sorted out before the Bandra project. Also, GPL is
SHAREHOLDING PATTERN (%)
in advanced talks for some redevelopment projects in the city.
 Major traction in land banking to pan out over the next two years: GPL
Mar-21 Jun-21

will deploy surplus funds over the next 24 months for purchasing land Promoters 58.44 58.43
parcels as it expects land costs to tighten after two years. It is targeting to FIs & Local MFs 5.21 5.14
achieve an RoE of around 20% in the long term. New launches, projects FPIs 27.89 28.07
completions, and higher share of owned projects will drive revenue and
Public & Others 8.46 8.36
profitability.
Consolidated Financial Summary Pledged Shares - -

YE March (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) FY21 FY22E FY23E FY24E Source : BSE
Net Sales 862 723 19 4,326 (80) 7,649 15,504 20,536 19,501
EBITDA 329 (535) (161) (1,541) (121) -3,336 1,666 6,010 6,098
APAT 170 (202) (184) 371 (54) 393 4,984 8,861 9,636 Parikshit D Kandpal, CFA
Diluted EPS (Rs) 0.6 (0.7) (184.1) 1.3 (54.2) 1.4 17.9 31.9 34.7 [email protected]
P/E (x) 1,172.7 92.5 52.0 47.9 +91-22-6171-7317
EV / EBITDA (x) (138.6) 280.8 78.0 73.6

RoE (%) 0.6 5.8 9.6 9.5 Chintan Parikh

Source: Company, HSIE Research [email protected]
+91-22-6171-7330
Estimate Change Summary
Consolidated FY22E FY23E
Manoj Rawat
(Rs mn) New Old % Change New Old % Change
Revenues 15,504 15,222 2 20,536 19,627 5 [email protected]
EBITDA 1,666 1,664 0 6,010 6,194 (3) +91-22-3021-7355
EBITDA margin (%) 10.7 10.9 (18) 29.3 31.6 (229)
APAT 4,984 4,930 1.1 8,861 8,806 0.6
Source: Company, HSIE Research

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HSIE Results Daily

Alkyl Amines SELL

High raw material prices affect margins CMP (as on 03 Aug 2021) INR 4,275

We maintain SELL on Alkyl Amines with a price target of INR 3,200 (WACC Target Price INR 3,200
10%, terminal growth 5%). The stock is currently trading at 55.6x FY23E EPS. NIFTY 16,131
We believe that the current valuation already factors in positives from the
potential volume growth, post doubling of the acetonitrile plant capacity, and KEY
OLD NEW
~40% additional capacities of the aliphatic amines plant. The rising raw CHANGES
material prices are looking as a dampener and can put pressure on the Rating SELL SELL
margins in FY22. EBITDA/APAT were 5/1% below our estimates, owing to Price Target INR 3,170 INR 3,200
higher-than-expected raw material costs, offset by lower-than-expected
FY22E FY23E
depreciation, higher-than-expected other income, and a lower-than-expected EPS %
tax outgo. +4.9% +0.4%

 Financial performance: Sales grew 3/60% QoQ/YoY to INR 3.9bn. Q1 KEY STOCK DATA
witnessed a volume degrowth of 2-5% sequentially, whereas realisation
Bloomberg code AACL IN
grew by 5-6%. Gross margin fell significantly to 48.9% (-808/-699bps
QoQ/YoY) in Q1 as raw material prices of key inputs such as acetic acid, No. of Shares (mn) 51
methanol and ammonia soared in the quarter. EBITDA margin came in at MCap (INR bn) / ($ mn) 218/2,941
28.3% (-664/-331bps QoQ/YoY) and witnessed a fall mainly due to the 6m avg traded value (INR mn) 573
trickle-down effect of a lower gross margin.
52 Week high / low INR 4,749/894
 Call takeaways: (1) Capex guidance for FY22/23 is INR 2.0/2.5bn. Apart
from this, the company is looking for a land parcel of 100-150 acres for its
STOCK PERFORMANCE (%)
future expansion plans. (2) The acetonitrile expansion project is on track and
3M 6M 12M
is expected to finish mechanical completion in Sep-21. The plant will be
commissioned in Q3FY22, and will ramp up in Q4FY22. (3) Preliminary Absolute (%) 26.8 113.0 364.9
work on the aliphatic amines expansion project has been completed. (4) The Relative (%) 15.2 106.7 322.1
company is carrying out a brownfield expansion for DMA HCL and is
increasing its capacity from 25ktpa to 30ktpa. This capacity should come SHAREHOLDING PATTERN (%)
onstream in Oct’21. (5) There was a planned shutdown of plants in April Mar-21 Jun-21
which also affected sales volumes in Q1FY22. Promoters 74.13 74.09

 Change in estimates: We raise our FY22 EPS estimate by 4.9% to INR 65.1 FIs & Local MFs 2.00 1.11
per share to factor in increased realisations across products, offset by higher FPIs 0.90 1.03
raw material costs in FY22.
Public & Others 22.97 23.77
Financial Summary
QoQ YoY Pledged Shares 0.00 0.00
INR mn Q1FY22 Q4FY21 Q1FY21 FY20 FY21 FY22E FY23E FY24E
(%) (%) Source : BSE
Net Sales 3,918 3,821 2.5 2,452 59.8 9,929 12,424 15,041 17,963 20,193
EBITDA 1,107 1,334 (17.0) 774 43.1 2,590 4,291 4,739 5,627 6,281 Nilesh Ghuge
APAT 785 926 (15.2) 528 48.8 1,798 2,953 3,325 3,930 4,381 [email protected]
AEPS (INR) 15.4 18.1 (15.2) 10.3 48.8 35.2 57.8 65.1 76.9 85.8 +91-22-6171-7342
P/E (x) 121.4 73.9 65.7 55.6 49.8 Harshad Katkar
EV/EBITDA(x) 84.4 50.6 45.6 38.2 33.7
[email protected]
RoE (%) 47.8 44.4 36.2 33.0 29.1
Source: Company, HSIE Research +91-22-6171-7319

Change in estimates Rutvi Chokshi

Y/E Mar FY22E Old FY22E New % Ch FY23E Old FY23E New % Ch [email protected]
EBITDA (INR mn) 4,533 4,739 4.5 5,606 5,627 0.4 +91-22-6171-7356
Adj. EPS (INR/sh) 62.1 65.1 4.9 76.6 76.9 0.4
Source: Company, HSIE Research Rachael Alva
rachael.alva @hdfcsec.com
+91-22-6171-7330

Page | 5
HSIE Results Daily

Kajaria Ceramics
Cost controls cushion margin hit
BUY
We maintain our BUY rating on Kajaria Ceramics (KJC) with an unchanged CMP (as on 3 Aug 2021) INR 1,028
target price of INR 1,130/share (19 Jun’23E consolidated EBITDA). We Target Price INR 1,130
continue to like KJC for its superior margin in the tiles segment (function of NIFTY 16,131
its robust distribution and cost controls) and its fast expansion in its bathware
and ply businesses. In Q1FY22, KJC’s consolidated revenue/EBITDA/APAT KEY
OLD NEW
fell by 41/58/66% QoQ to INR 5.62/0.80/0.43bn respectively (with the lockdown CHANGES
impacting consolidated revenue). Its QoQ margin compression is much lower Rating Buy Buy
vs peers. With demand recovering June onwards, tiles prices have increased Price Target INR 1,130 INR 1,130
by ~3% in July, boosting cost pass-through and, hence, margin should
EBITDA FY22E FY23E
rebound. KJC’s upcoming capacities will continue to support its market share,
revision %
strengthening its leadership position in the domestic market. - -

 FY22Q1 performance: KJC’s tiles/non-tiles revenue fell 40/51% QoQ, hit

hard by the lockdown in Q1. Gas prices also rose ~10% QoQ, thereby further KEY STOCK DATA

hitting profits. However, it managed to restrict the EBITDA margin (at Bloomberg code KJC IN
14.3%) contraction to ~6pp QoQ through its agile fixed cost controls. Its No. of Shares (mn) 159
margin contraction is much lower than that of some of the smaller peers
MCap (INR bn) / ($ mn) 164/2,202
who reported ~10-15pp QoQ compression. Demand is on an upswing June
onwards. KJC guided that its utilisation has firmed up to 95% in July against 6m avg traded value (INR mn) 249
75% in Q1, owing to healthy demand. It has also taken price hikes across 52 Week high / low INR 816/243
both tiles (+3% in July) and bathware (+10% in May) to pass on the gas price
and brass price inflation respectively. STOCK PERFORMANCE (%)
 Con call takeaways: KJC expects its tiles revenue to grow ~18-19% in FY22E, 3M 6M 12M
owing to strong distribution and market penetration. On a low base, it is
Absolute (%) 11.1 18.5 149.7
targeting 50/100% jump in its bathware/ply segments. Its ongoing Capex of
INR 2.5bn will increase its tiles capacity by 17% by early FY23E, bolstering Relative (%) (0.4) 12.2 106.9
its volume growth and market share gain. Over the next three years, KJC
expects to expand its tiles market share in India to 15%+ from 12% currently. SHAREHOLDING PATTERN (%)
Continued buoyancy in export markets and elevated gas prices in the Morbi Mar-21 Jun-21
cluster will reduce competitive pressures for national players in domestic
Promoters 47.54 47.54
markets. We maintain our earnings estimates and target price.
FIs & Local MFs 14.46 14.89
Quarterly/annual financial summary (consolidated)
YE Mar Q1 Q1 YoY Q4 QoQ FPIs 25.25 25.09
FY20 FY21 FY22E FY23E FY24E
(INR mn) FY22 FY21 (%) FY21 (%)
15.3 7.7 99.2 25.4 (39.9) 78.1 75.4 87.2 107.1 121.0 Public & Others 12.75 12.48
Tiles sales (MSM)
NSR (Rs/Kg) 368 362 1.6 375 (1.9) 334 336 342 350 353 Pledged Shares - -
Tiles Revenue 5,193 2,577 101.5 8,659 (40.0) 26,049 25,328 29,851 37,452 42,744 Source : BSE
Others Revenue 423 199 113.1 867 (51.1) 2,032 2,482 3,831 4,677 5,716
Pledged shares as % of total shares
Net Sales 13,256 9,115 45.4 14,243 (6.9) 28,080 27,809 33,682 42,129 48,460
EBITDA 2,582 1,726 49.6 3,131 (17.5) 4,159 5,088 6,408 8,878 10,004
EBITDAM (%) 14.3 (2.7) 20.0 14.8 18.3 19.0 21.1 20.6
APAT 1,313 489 168.3 2,286 (42.6) 2,553 3,081 3,653 5,050 5,696
Diluted EPS (Rs) 11.2 4.2 168.3 16.2 (31.2) 16.0 19.4 23.0 31.7 35.8
EV / EBITDA (x) 39.3 31.7 25.1 18.0 15.8
P/E (x) 64.1 53.1 44.8 32.4 28.7
RoE (%) 14.9 16.6 17.9 22.1 21.9
Source: Company, HSIE Research, Others revenues include bathware and ply Rajesh Ravi
[email protected]
+91-22-6171-7352

Page | 6
HSIE Results Daily

Orient Cement
On a strong footing
BUY
We maintain our BUY rating on Orient Cement with a revised target price of CMP (as on 3 Aug 2021) INR 167
INR 187/share (7.5x Jun’23E consolidated EBITDA). In line with the Target Price INR 187
performances of its peers in the south, Orient reported strong margin NIFTY 16,131
expansion during Q1FY22. Solid pricing gains across the south and west
regions offset the impact of 26% QoQ volume decline and rising fuel, diesel KEY
OLD NEW
and packing costs. Thus, unitary EBITDA expanded 25% QoQ to INR CHANGES
1368/MT (Orient’s best-ever margin) and moderated the profit decline. In Rating Buy Buy
Q1FY22, its revenue/EBITDA/APAT declined 17/8/10% QoQ to INR Price Target INR 187 INR 178
6.91/1.86/0.9bn respectively. We continue to like the company due to a healthy
demand outlook, its comfortable balance sheet, and its 3mn MT expansion EBITDA FY22E FY23E
revision % 9.4 3.3
plan.
 All-time high margin in Q1FY22: While volume fell 26% QoQ during the
lockdown, robust pricing gain (+13% QoQ) buoyed unitary EBITDA to an KEY STOCK DATA

all-time high of INR 1,368/MT. ORCMNT increased the share of blended Bloomberg code ORCMNT IN
cement sales (70% vs ~55% in FY20). In its key markets, the share of its No. of Shares (mn) 205
premium cement sales has increased to 15-18% of its trade sales (from ~8%
MCap (INR bn) / ($ mn) 34/461
in FY20). Orient has also stocked up domestic coal inventory ahead of the
price increase, thereby moderating fuel inflation impact Q2 onwards. Amid 6m avg traded value (INR mn) 154
no major ongoing Capex currently, Orient reduced debt by 15% in H1FY22. 52 Week high / low INR 172/56
 Outlook: Orient expects to deliver 6mn MT sales in FY22E despite the
lockdown impact in Q1. The ongoing grinding debottlenecking will increase STOCK PERFORMANCE (%)
its capacity by 0.5mn MT in FY22. In FY23, it will start work to expand 3M 6M 12M
capacity by 3mn MT (~1/2mn MT grinding/clinker at Devapur and 2mn MT
Absolute (%) 49.8 82.6 163.8
SGU in Maharashtra) to be completed by FY24E (entailing Capex of INR
16bn). In FY23, it expects to commission a WHRS plant in Karnataka. As Relative (%) 38.3 76.3 121.0
major Capex will start in FY23, we estimate its net debt/EBITDA to remain
under 2.5x, as ORCMNT’s capacity increases to 11.5x by FY25E. Factoring in SHAREHOLDING PATTERN (%)
healthy demand and pricing, we raise our EBITDA estimates for Mar-21 Jun-21
FY22/23/24E by 9/3/6% respectively. We remain positive on the company’s
Promoters 37.37 37.37
outlook and maintain our BUY rating with a revised target price of INR
187/sh (7.5x its Jun’23E EBITDA). FIs & Local MFs 24.08 20.64

Quarterly/annual financial summary FPIs 2.09 4.43

YE Mar Q1 Q1 YoY Q4 QoQ
FY20 FY21 FY22E FY23E FY24E Public & Others 36.46 37.56
(INR mn) FY22 FY21 (%) FY21 (%)
Sales Vol (mn MT) 1.4 0.8 66.0 1.9 (26.4) 5.8 5.1 5.9 6.4 7.0 Pledged Shares 5.25 5.25
NSR (INR/MT) 5,076 5,004 1.4 4,495 12.9 4,171 4,602 4,740 4,645 4,692
Source : BSE
Opex (INR/MT) 3,708 3,806 (2.6) 3,400 9.0 3,512 3,512 3,754 3,749 3,799
Pledged shares as % of total shares
EBITDA(INR/MT) 1,368 1,198 14.2 1,095 25.0 659 1,090 987 896 893

Net Sales 6,909 4,104 68.4 8,316 (16.9) 24,218 23,241 28,008 29,918 32,634
EBITDA 1,862 982 89.5 2,025 (8.1) 3,829 5,507 5,829 5,772 6,213
APAT 895 256 249.1 999 (10.4) 866 2,142 2,468 2,535 2,907
AEPS (INR) 4.4 1.3 249.1 4.9 (10.4) 4.2 10.5 12.0 12.4 14.2
EV/EBITDA (x) 6.8 3.8 6.6 7.4 7.6
EV/MT (INR bn) 3.28 2.44 4.51 5.01 5.57
P/E (x) 16.5 6.7 13.9 13.5 11.8
RoE (%) 8.0 17.7 17.5 15.7 15.7 Rajesh Ravi
Source: Company, HSIE Research [email protected]
+91-22-6171-7352

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HSIE Results Daily

Rating Criteria
BUY: >+15% return potential
ADD: +5% to +15% return potential
REDUCE: -10% to +5% return potential
SELL: > 10% Downside return potential

Disclosure:
Analyst Company Covered Qualification Any holding in the stock
Varun Lohchab Dabur India PGDM NO
Naveen Trivedi Dabur India MBA NO
Saras Singh Dabur India PGDM NO
Parikshit Kandpal Godrej Properties CFA NO
Chintan Parikh Godrej Properties MBA NO
Manoj Rawat Godrej Properties MBA NO
Harshad Katkar Alkyl Amines MBA NO
Nilesh Ghuge Alkyl Amines MMS NO
Rachael Alva Alkyl Amines CA NO
Rutvi Chokshi Alkyl Amines CA NO
Rajesh Ravi Kajaria, Orient Cement PGPM NO

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 HSIE Results Daily

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