The Orient Cement Ltd stock hit a new 52-week high of 132 on the NSE in early morning trade on Tuesday. The Street is impressed by the company’s strong operational performance in the March quarter.It’s Ebitda at 200 crore was highest-ever in a quarter and ahead of analysts’ estimates of 140-155 crore. Ebitda is short for earnings before interest tax depreciation and amortization. Tight cost control and volumes growth of 18% on a year-on-year (y-o-y) basis, led to Ebitda out-performance. Ebitda/tonne improved from 792 to 1,095 compared to the same quarter in 2020.
Ebitda margin rose by 530 basis points (bps) in Q4FY21 to 24.4% compared to the year ago period; sequentially, operating margin increased by around 175bps. One basis point is one hundereth of a percentage point.
Another positive takeaway for investors was the company’s continued effort to pare debt. In FY21, it gross debt declined 430 crore, while, net debt was down 550 crore. Consequently, key metric – the net debt/equity ratio fell from 1.1 times in FY20 to 0.49 times in FY21. Further, net debt/Ebitda also fell from around 3times in FY20 to 1.17 times in FY21.
Aided by solid operating performance and de-leveraging, its net profit more than doubled in the March quarter to 99.87 crore from 44.06 crore in the same quarter last year.
While the company has managed to report stellar performance in the March quarter, analysts caution of the adverse impact of second wave of Covid on cement demand. Apart from that, the sector is also faced with the pressure of rising input costs.
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