Gladiator Stocks - Orient Cement - ICICI Direct

Technical View

The Midcap Cement space has regained upward momentum and currently most of the stocks are trading in the vicinity of all-time highs. Meanwhile, the share price of Orient Cement has relatively underperformed the midcap Cement space. We expect catch up activity should be seen in the stock as it is resolving out of past five weeks consolidation (Rs. 149-123) after forming a higher base above multiyear breakout area of Rs. 125, indicating resumption of uptrend. Thereby offering fresh entry opportunity.

Key point to highlight since Oct-2020 is that, the up move has been captured in a well-defined upward sloping channel wherein on multiple occasions elevated buying demand emerged from 50 days EMA. In current scenario as well we expect stock to maintain the aforementioned rhythm as it formed a higher base above 50 days EMA.

Fundamental View

- Orient cement is mid-sized (8MT capacity) cost-efficient player in the cement space. Its self-sufficiency in power (95MW), ability to switch between fuels (pet-coke, coal), lower lead distance and proximity to key raw materials like limestone, coal as well as end-market has helped it to maintain its cost leadership in the industry

It is reckoned as one of the most efficient players in terms of cost of production. The Company has weathered tough times in the past without diluting its balance sheet. Its presence in rural centric markets in Telangana, Maharashtra and Karnataka will provide key support to its earnings in the current challenging environment. Key factors driving demand over FY21-23E are: a) strong rural demand b) irrigation projects c) housing projects in AP/Telangana and infrastructure projects like metro in Mumbai-Pune, Mumbai-Nagpur Expressway, etc. Also, the pricing has improved in the past 15 months that should lead to better margins, going ahead

For details, click on the link below: Link to the report

Shares of Orient Cement Ltd was last trading in BSE at Rs.145 as compared to the previous close of Rs. 143.9. The total number of shares traded during the day was 266575 in over 6231 trades.

The stock hit an intraday high of Rs. 151.35 and intraday low of 143.7. The net turnover during the day was Rs. 39578680.

Source : Equity Bulls

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