This Smallcap Cement Stock Fall 52 Week Low, Drop 36% in 6 Months: Should You Buy?

Indian stock market is bearish today, due to inflationary pressure and recent rate repo hikes. Nifty fell 0.17%, and stood at 15,267.60 points at 2.08pm today. The below-mentioned cement stock has also fallen significantly today, however, the stock has good potential. With a target price of Rs. 135, brokerage firm ICICI Securities has suggested buying this stock.

Orient Cement Ltd.

The stock price of Orient Cement Ltd. has reached its 52 weeks low level today. With a total capacity of 8 MTPA, the cement manufacturer serves in the states of Maharashtra, Telangana, Andhra Pradesh, Karnataka and parts of Madhya Pradesh, Tamil Nadu, Kerala, Gujarat and Chhattisgarh. Share price of Orient Cement Ltd. has fallen by 4.67%, and stood at Rs. 98.95, today till last traded.

It is a small cap company with a market capitalization of Rs. 2,024 crore. The 52 week high level of this stock is Rs. 185.55, and 52 week low level of this stock is Rs. 98.30. in the past 6 months, its stock price has fallen by 36.89%, in the past 1 year its stock price has fallen by 27%. However, in the past 2 years the stock’s price has gained sharply. On June 19, 2020 its stock price stood at Rs. 72.95/share, so gained by around 36% in 2 years. In the last month, the Indian stock markets were very bearish, so, this cement stock has also been quite flat.

Additionally, Orient Cement Ltd. is also fetching a dividend yield of 2.53%, which can be profitable for its shareholders. An investor should check the stock’s potential depending on the company’s guide on its capital expenditure and further developments.

The cement company’s net profit has fallen by 26.67% to Rs. 73.24 crore in Q4FY22, and sales have fallen by 3.34% to Rs. 803.86 crore in the same quarter. However, the company’s net profits have been remarkably good in the full fiscal. IN FY22, net profits grew by 22.90% to Rs. 263.25 crore, as against Rs. 214.19 crore in FY21. Additionally, its sales grew by 17.27% to Rs. 2725.42 crore in FY22, as against Rs. 2324.09 crore in FY21. So, going beyond the short term goals, one investor can check the profile of the said cement stock considering long term goals.

Established in 1979, Orient Cement was formerly, a part of Orient Paper & Industries. However, the company was demerged in 2012. it is one of the fastest growing and leading cement manufacturers in India. The company started cement production in 1982 at Devapur in Adilabad District, Telangana. In 1997, a split-grinding unit was added at Nashirabad in Jalgaon, Maharashtra. In 2015, Orient Cement started commercial production at its integrated cement plant.