(Reuters) – India’s Orient Cement reported a slump in third-quarter profit on Friday due to weak prices of the key construction material amid seasonally low demand.
The company reported a net profit of 101.4 million rupees ($1.2 million) in the quarter, a fourth of what it had reported in the year-ago quarter. Its revenues fell more than 14%.
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KEY CONTEXT
The October-December quarter is a seasonally weak period for cement companies as construction activity slows, including due to the number of festivals that span the period.
While cement prices picked up during the quarter, they were still about 11% lower at the end of December from the year-ago period, data from brokerages Ambit and Nuvama showed.
On Thursday, market leader UltraTech Cement flagged improving price and demand trends after posting a quarterly earnings beat, while earlier this week, Dalmia Bharat also signalled for improving quarters ahead.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Orient Cement 29.31 13.31 8.44 36.30 Sell 5 1.28 0.67
JK Lakshmi Cement 24.62 10.74 11.72 35.70 Buy 11 0.97 0.83
ACC 17.46 9.68 8.07 24.70 Buy 17 0.78 0.37
Dalmia Bharat 34.79 11.57 8.93 32.53 Hold 27 0.94 0.50
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG IBES
— $1 = 86.1870 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Savio D’Souza)
