Orient Paper & Industries Ltd Poor performance of Electricals division drags profits :Emkay,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Orient Paper & Industries Ltd

Poor performance of Electricals division drags profits

BUY

CMP: Rs62                                        Target Price: Rs82

---

n     EBITDA at Rs556 mn (+196.2% yoy), lower than estimates (Rs652mn) led by poor performance of electricals division. Electrical revenues grew 7% with EBIT margins at mere 1.9%

n     Cement revenues grew 57% yoy (Rs2.9) bn entirely driven by a sharp 55% yoy jump in realization (Rs3555/t). However with higher energy & freight cost, cement EBIT/t at Rs683 came in lower than est(Rs730/t)

n     De-merger of cement business into a new wholly owned sub- Orient Cement Ltd - triggers the much awaited value unlocking process

n     Maintain Earnings. Stock trades at undemanding valuation of 5.5x FY13 PER & EV/EBIDTA of 3X. We maintain our BUY rating on the stock with target price of Rs82