Orient Paper & Industries: Cement prices drives better than expected numbers: Emkay

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Orient Paper & Industries Ltd

Cement prices drives better than expected numbers

BUY

CMP: Rs 60                                        Target Price: Rs 74

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n     Net profit at Rs775mn (+41% yoy) above est (Rs620mn) led by higher cement prices & other income. Revenues at Rs6.96bn (+27%), Cement (+22%) , Electricals (+35%) & Paper (+24%)

n     Cement revenues grew 22% yoy to Rs3.34 bn as realizations improved 29% yoy and 15.6% qoq led by price hikes in OPIL’s key markets of AP and Maharashtra

n     Upgrading FY12 earnings by 5.9% to Rs9.3 and introducing FY13 estimates with EPS of Rs11.3. Increasing cost key concern, as CIL coal price hike yet to reflect in P&F costs

n     OPIL on growth path led by better cement realizations, new product launches in Electricals division and stabilization of Amalai Paper plant. Maintain BUY with TP of Rs74