Orient Cement Limited

BUY
Axis Annual Analysis Orient Cement Ltd Target Price
17th July,2023 Cement 165

Capacity Expansion & Premiumization to Drive Growth (CMP as of July 14, 2023)
Summary
 Modest revenue & volume growth: The company reported revenue of Rs 2,937 Cr, CMP (Rs) 144
posting a growth of 8% on a YoY basis. Higher volume and better realization contributed to Upside /Downside (%) 15
improved sales during the year. The sales volume stood at 5.76 mtpa, reporting satisfactory
High/Low (Rs) 149/109
growth of 5% in FY23.
 Strong performance by premium products: The company’s premium product Birla A1 Market cap (Cr) 2890
StrongCrete and others formed 15% of overall trade sales against 11% in FY22 as a result Avg. daily vol. (6m) Shrs. 867115
of better market penetration, digitization, branding, and promotion activities. This also
resulted in higher realization despite the higher competitive intensity. The company aims to No. of shares (Cr) 20.5
take a proportion of its Premium Cement to 30% in the next couple of years.
 EBITDA de-growth: The company’s EBITDA margins declined to 12.4% from 21.7% in Shareholding (%)
FY22 as the overall cost of cement production increased by 15% to Rs 4,467/tonne during
the year. Sep-22 Dec-22 Mar-23

Key Highlights Promoter 37.9 37.9 37.9

 Debt reduction and net debt increase: Orient Cement (OCL) reduced its long-term debt in FIIs 6.43 6.02 7.72
FY23 by 34% to Rs 98 Cr from Rs 148 Cr in FY22. However, its net debt increased by 19%
in FY23 owing to higher short-term borrowings undertaken to meet working capital MFs / UTI 8.47 8.7 7.16
requirements during the year. Banks / FIs 0.07 0.07 0.07
 Increased blended realization and focus on premium products: The blended realization Others 47.13 47.3 47.35
for the year stood at Rs 5,100/tonne, an increase of 3% YoY. This was owing to the
company’s clear focus on increasing sales of its premium products, which yielded robust
growth of 22% YoY. Furthermore, the company leveraged its brand portfolio and product Financial & Valuations
quality to seek better cement prices during the year.
 Expansion plans and greenfield unit in Rajasthan: With the transfer of limestone mines Y/E Mar (Rs Cr) FY23 FY24E FY25E
in Rajasthan, the company is working to set up a 3 mtpa greenfield unit in the region but the Net Sales 2,938 3,206 3,463
operational timeline has not yet been announced. Additionally, the company is also EBITDA 365 550 628
expanding its cement capacity at its existing unit in Chittapur by 3 mtpa and expects it to get Net Profit 123 235 256
commissioned in FY26. The 10.1 MW WHRS plant at Chittapur is expected to get
commissioned in Q1FY24. It is noteworthy that the company doubled its use of renewable EPS (Rs) 6 11 12
energy to 14% from the FY22 levels. PER (x) 18 12 11
 WHRS plant expected to get commissioned in Q1FY24: The 10.1 MW WHRS plant EV/EBITDA (x) 6.3 6.0 5.7
located in Chittapur is expected to get commissioned in Q1FY24 and will contribute 35% of 1.4 1.6 1.4
P/BV (x)
the total energy requirement. Total renewable power consumption in the unit will increase to
53%, which will help the company further reduce its fuel costs moving ahead. ROE (%) 8 13 12
Key Competitive Strengths: a) One of the lowest cost producers of cement in India; b) Robust Change in Estimates (%)
sales and distribution network; c) Strengthening financial position; d) Experienced management
bandwidth; e) Strong regional presence. Y/E Mar FY24E FY25E
Strategies Implemented: a) Focus on the sale of premium cement; b) Focus on profitable sales -1 0%
Sales
based on the replacement cost of resources consumed; c) Use of more alternative fuel to reduce
power/fuel cost; d) Increase in asset utilisation to improve the overall efficiency and minimise the EBITDA -2 0%
logistics cost. PAT -3 0%
Growth Drivers: a) Rising Urbanization; b) Housing for all; c) The government’s keen focus on ESG disclosure Score**
infrastructure development including roads, highways, metros, and airports, and e) PM Gati
Environmental Disclosure Score NA
Shakti-National master plan.
Key Focus Areas Moving Forward: a) Capacity expansion; b) Improving sale of blended and Social Disclosure Score NA
premium cement; c) Cost optimization; d) Focus on a sustainable operation. Governance Disclosure Score NA
Outlook & Recommendation: The current cost pressure will start easing from Q1FY24 but the NA
Total ESG Disclosure Score
full impact of lower fuel cost will be felt only in Q3FY24 and onwards due to the lag effect.
Moreover, the company’s ongoing capacity expansion plan will enable it to successfully feed Sector Average 46.33
rising cement demand moving forward. Backed by the higher infra spend by the government, Source: Bloomberg, Scale: 0.1-100
focus on affordable and low-cost housing, encouraging real estate demand, and pre-election **Note: This score measures the amount of ESG data a company reports publicly
spending, we believe the cement demand is likely to remain resilient going ahead. and does not measure the company's performance on any data point. All scores
The company’s premium cement portfolio is growing well and an attempt to increase trade sales are based on 2022 disclosures
would help it improve its realizations and thereby margins as well. Furthermore, deleveraging the Relative performance
balance sheet has also strengthened the company’s overall financial standing. On the valuation
front, the stock is currently trading at 6x and 5.5x FY23E and FY24E EV/EBITDA and EV/Tonne
of $47 and $52 for FY24E and FY25E which we believe is attractive. We value the company at 125
6.5x its FY25E EV/EBITDA and retain our BUY rating on the stock with a TP of Rs
165/share, implying an upside of 15% from the CMP. 75

Key Financials 25
(Rs Cr) FY23 FY24E FY25E Jan-22 May-22 Sep-22 Jan-23 Jun-23
Net Sales 2,938 3,206 3,463
EBITDA 365 550 628 Orient Cement Ltd. BSE Sensex
Net Profit 123 235 256 Source: Ace Equity, Axis Securities
EPS (Rs) 6 11 12
PER (x) 18 12 11
EV/EBITDA (x) 6.3 6.0 5.7 Uttam K Srimal
P/BV (x) 1.4 1.6 1.4 Research Analyst
ROE (%) 8 13 12 Email: uttamkumar.srimal@axissecurities.in
Source: company, Axis Research
ShikhaDoshi
Research Analyst
Email: shikha.doshi@axissecurities.in

1
Company Overview
The company embarked upon its journey in 1979 at Devapur (Telangana) and de-merged from Orient Paper
and Industries Limited in 2012. The company’s plants are located in Devapur (Telangana), Chitapur
(Karnataka), and Jalgaon (Maharashtra) with a total cement manufacturing capacity of 8.5 mntpa with 2
Integrated and 1 Split Grinding unit, Clinker capacity (5.5 mntpa), and Captive power plant capacity (95 MW).
Currently, it is operating in key markets of Maharashtra, Telangana, and Karnataka, and also making inroads in
newer markets of Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Kerala, Uttar Pradesh, Gujarat, Tamil Nadu,
and Goa.

FY23-Performance Round-up
 Modest growth in Revenue & Volume: The company reported revenue of Rs 2,937 Cr, up 8% YoY.
The FY23 may be summed up as a year of two halves where H1FY23 witnessed relatively low growth
owing to subdued demand in its operating region along with higher monsoon rain, impacting the
performance. H2FY23 witnessed good growth led by a pick-up in cement consumption with improved
pricing. H1 witnessed volume de-growth of 11% while H2 saw volume growth of 11% leading to
overall volume growth of 5% YoY.

 Growth of 3% in realization: The realization for the year stood at Rs 5,100/tonne, an increase of 3%
due to the focus on the promotion of premium cement. The sales volume stood at 57.6 Lc tonne with
a growth of 5% in FY23. Trade sale was down 9% YoY while non-trade sale improved by 29%. As a
result, blended cement sales stood at 57% against 63% in FY22.

 De-growth in EBITDA margins: The company reported an EBITDA margin of 12.4% in FY23
against 21.7% in FY23. Its capacity utilization stood healthy at 68% during the year. EBITDA margin
was impacted owing to higher input cost, particularly power/fuel cost, which was up 41% on a per
tonne basis.

 Decline in the company’s profitability: In FY23 the company witnessed a sharp fall in profitability
down 53% YoY as rising input costs and lower-than-expected volume growth resulted in lower profit.

 Total dividend of 1.5/share: The Board declared an interim dividend of 0.5/share and has now
proposed a final dividend of Rs 1/share for FY23. Last year, the total dividend paid stood at Rs
1.75/share.

Exhibit 1: Product-wise cement sale in FY22 Exhibit 2: Product-wise cement sale in FY23

37% 43%

63% 57%

Blended Non blended Blended Non blended

Source: Company, Axis Securities

2
Cost Optimization Measures
 Power/Fuel Cost: In FY23, Power & Fuel costs stood at Rs 1,611/tonne. It increased by 41% on a
YoY basis owning unprecedented cost-push inflation exacerbated by uncertain and sporadic supply
during the year. Global supply chain dislocations and disruption in global trade in the wake of
continuing geopolitical conflict in Europe have stoked the inflation in power and fuel costs (which is a
major contributor to the total cost of cement production) and also impacted other raw materials costs
severely. The company managed to mitigate the impact by improving its operating efficiencies, taking
strategic calls on locking fuels to ensure price arbitrage and its availability, and overarching thrust on
the replacement of fossil fuels with alternate fuels.

 Freight/Forwarding Cost: Freight & forwarding costs stood at Rs 1,366/tonne, up 5% on a per tonne
basis as overall lead distance during the year increased in the procurement of raw materials and
selling of finished goods. The busy season surcharge levied by railways also contributed to higher
freight costs. The company also resorted to utilising higher capacity vehicles to lower costs per MT.
The company has a tiered structure to recognise and manage fuel price escalation that is contractually
recognised by its vendors to maintain some stability for both the company and the logistics partners

 Raw Material Cost: Raw material costs stood at Rs 671/tonne which was higher by 4% on a tonne
basis owing to higher volume and higher fuel cost. During the year, the company has procured
alternative fuels and raw materials (AFR) like bio-waste, pharma waste, municipal waste, plastic
waste, paper waste, tyre waste, and so on that are used in the fuel mix for boilers and kilns.

 Other Expenses: Other expenses stood at Rs 530/tonne, flattish YoY on a per tonne basis owing to
better cost management.

3
Key Operational Activities During The Year
Higher sales of premium Cement

During the year, the company’s premium cement sales increased by 22% and in overall trade sales the
proportion of premium cement increased from 11% to 15% in FY23. The company also launched a new
product in the premium segment namely Birla A1 Orient Green in Nov 2022. Its ‘Birla.A1 StrongCrete’ continues
to gain strength as a super-premium product. In Q1, the company increased the price premium of ‘Birla.A1

StrongCrete’ by Rs10/bag.

Higher price realization

During the year, realization improved by 3% despite higher competitive intensity as the company planned and
implemented its strategy based on the better geo and product mix.

Reduction in long-term debt

During the year, the company refinanced and reduced its outstanding long-term debt from Rs 148 Cr to Rs 98
Cr (as of March 31, 2023).

Renewable energy

During the year, your Company utilised its solar power capacity set up under the Captive Scheme with AMP
Solar Systems Private Limited at its optimum and substituted ~59% of its power needs at the Grinding Unit at
Jalgaon, Maharashtra. The company continued to source renewable power at its Chittapur plant, Karnataka,
whenever available and financially viable, through open access sources and IEX exchanges.

WHRS Unit in the Chittapur plant

Construction of the 10.1 MW WHRS facility for the Chittapur plant is at its peak and it is expected to start
generating and supplying power during the first quarter of FY 23-24 which will help in further reduction in power
cost and CO2 emission.

Optimizing Power/Fuel cost

The company is consistently enhancing its operational efficiency through various measures: (a) Optimising
thermal and electrical energy; (b) Promoting circular economy through initiatives like migration to pet coke, co-
processing of waste materials as alternative fuels and raw materials and switching to renewable energy. (c)
Resource optimization like greater utilisation of sub-grade materials through planned and assured raw mix
quality and so on.

During the year, the company continued its initiative to enlarge its alternative fuel source basket and further
improved its technical capabilities to handle both hazardous and non-hazardous waste streams. This has
helped the company to address one of the prime objectives of environmental sustainability by promoting green,
clean, and sustainable operations along with reducing costs.

4
Key Growth Drivers
 Urbanisation – India’s working population (age 25-64) will overtake China between 2030 and 2035,
making it the world’s largest working-age population. It is estimated that by the end of FY25, 37%
(541 million) of India’s population will reside in urban areas. According to CRISIL, the need for
housing in both urban and rural regions is steadily expanding. This will help accelerate urbanisation,
thereby increasing demand for housing and related services, which in turn, will boost cement
demand.

 Housing for All – The Finance Ministry increased the budget allocation for the Pradhan Mantri
Awaas Yojana from Rs 48,000 Cr to Rs 79,000 Cr for FY24. With a target of building 29.5 million
houses by FY24, 21.1 million houses have already been constructed and the remaining houses are
expected to be constructed by March 2024. This will keep the cement demand at an elevated level.

 Infrastructure push by Government – The government has been consistently investing in

infrastructure to drive the country’s development agenda. It has earmarked Rs 10 Tn as capital
expenditure for Budget 2023-24, an increase of 33% above FY23 budget estimates and 37% above
FY22 revised estimates. The consistent rise in capital spending is a positive indicator for cement
consumption in the coming years. Furthermore, initiatives like National Infrastructure Pipeline and PM
GatiShakti among others are likely to drive the construction activities in the country, fuelling more
demand for cement

 PM Gati Shakti – The PM Gati Shakti National Master Plan would provide integrated and seamless
connectivity for the movement of people, goods and services, facilitating last-mile connectivity of
infrastructure. The total outlay of Capex has been stepped up sharply by 35.4% from Rs 7.5 Lc Cr to
Rs 10 Lc Cr in this year’s Union Budget. The states have been allocated interest-free long-term loans
of Rs 1 Lc Cr to support these initiatives.

Exhibit 3: Cement consumption trend segment-wise: Housing remains the largest cement consumer

60% 55%

50%

40%

30%
22%
20% 13%
10%
10%

0%
Housing Industrial & Commercial Infrastructure Low Cost Housing

Source: Company, Axis Securities

5
Key Strategies Moving forward

Capacity Expansion

With the transfer of limestone mines in Rajasthan, the company is working to set up a 3 mtpa Greenfield unit in
the region, but the operational timeline has not yet been announced. Apart from this, the company is also
expanding its cement capacity by 3 mtpa at its existing unit in Chittapur, and it is expected to get commissioned
in FY26. The 10.1 MW WHRS plant at Chittapur is also expected to get commissioned in Q1FY24.

Improving sales of Premium Cement

The company is focusing on increasing the sale of blended and premium cement in its operating regions and
has achieved considerable success in this regard. The company’s premium product Birla A1 StrongCrete
witnessed an overall growth of 17% YoY, which was driven by better market penetration, digitization, branding,
and promotion activities undertaken by the company during the year.

Cost Optimization

In the current scenario of rising cost inflation, it becomes imperative for companies to optimize costs and
balance cost structures. The company has taken various initiatives to optimize the cost of power/fuel, logistics,
and procurement to enable it to report healthy performance. To reduce power/fuel costs, the company is setting
up a 10MW WHRS plant at its integrated plant in Chittapur, Karnataka. On the logistic and procurement front
also, several initiatives have been undertaken for cost optimization.

Sustainable Operation

Sustainability remains the major focus area of the company and to embrace it, the company has undertaken
various measures such as increased production of blended cement, use of alternative fuel through conversion
of different kinds of waste materials, setting up of WHRS plant to produce more green energy and conservation
of water and natural resources.

6
Business Outlook
Considering the strong focus on the housing and infrastructure sectors in the FY24 Budget, demand for cement
in India is predicted to grow by 8-10%. This includes investments in road, rail, port, housing and other critical
infrastructure development. Consequently, demand for cement is expected to soar to support these projects.

Non-residential sectors such as infrastructure development and commercial projects are expected to drive
cement market growth in the short and long term. The eastern regions are predicted to grow the fastest,
followed by the central and southern regions, with the northern and western regions expected to grow more
slowly.

Sales & Distribution

Orient Cement made a substantial investment in enhancing its sales and distribution channels and capabilities
over the years. The company’s focus on digitization and automation, such as implementing Sales Force
Automation (BizSmart), Dealer Management System, Electronic Proof of Delivery (EPOD), analytical tools like
Qlik Sense and CRM Platforms (SFDC), has helped to achieve operational excellence. Key initiatives taken by
the company in this regard are under
1. Focus on premium product
2. Micro market penetration
3. Introducing a percentage-linked incentive scheme
4. Digital task force
5. Channel bulletin automation
6. Bulk and bag container rake

Supply chain & Logistics

Logistics, in the cement industry, is one of the largest elements of the value chain and constitutes a significant
proportion of the operating costs. It plays a vital role in balancing the supply and demand of both raw materials
and finished goods. The company constantly tries to optimise its logistics through various dynamic strategies.
During the year, the company undertook the following activities to optimise supply chain and logistics.

 The company has moved a lot more of its material using rail mode, again contributing to better cost
management and greener logistics.

 The company has increased direct dispatch to avoid multiple handling and longer routes.

 Asset utilisation is increased to improve the overall efficiency and minimise the logistics cost.

 The company is also optimising routes and depot locations to decrease travel distance, improve
timely availability, and save on fuel costs.

 The company has a tiered structure to recognise and manage fuel price escalation that is
contractually recognised by its vendors to maintain some stability for both the company and the
logistics partners.

 The company has also resorted to utilising higher capacity vehicles to lower costs per MT and
increased dispatch through rail to optimise freight cost.

 The company has implemented Electronic Proof of Delivery (EPOD) to ensure deliveries to intended
locations. The EPOD enables a transparent process by bringing visibility to the last-mile delivery
through end location capture. This helped in reducing the average billing cycle and introduced
automated reconciliation through a fully digitized platform.

 To achieve the most optimised production costs, the company remained agile in optimising its fuel
and raw material mix to cope with the supply-side challenges. During the year, the company has
procured alternative fuels and raw materials (AFR) like bio-waste, pharma waste, municipal waste,
plastic waste, paper waste, tyre waste, and so on to be used in the fuel mix for boilers and kilns.

7
Risks & Mitigation
OCL is a growing company and its ability to create and sustain value for its stakeholders depends on
identifying, monitoring, and effectively addressing key risks within the environment in which it operates.

Exhibit 4: Risk Management Process

Source: Company, Axis Securities

 Excess capacity and increasing competition: The leadership regularly reviews capacity expansion
and growth strategies. Southern India has a structural overcapacity, while competition is intensifying
in the company’s core markets in Maharashtra, Telangana and Karnataka. The company is working
to improve brand positioning, strategies for effective channel engagement and competitiveness to
stay ahead.

 Volatility in prices of raw materials and fuel: Efforts are being made to mitigate risks by optimising
fuel procurement for arbitrage and availability. Measures include expanding the supplier base for pet
coke and chemical gypsum, increasing the use of AFR and improving the sourcing of fly ash for the
Chittapur plant. The company has made long-term arrangements to improve fly ash sourcing, and the
fly ash rake handling system operational from Apr’23 would provide further cost savings through
increased availability.

 Health & Safety: While safety activities are continuously monitored, the priority now is enhancing and
monitoring safety performance at project sites

 Cyber Security: The company has implemented SAP S/4HANA with SAP Rise, implying the data
centre is now open to Cloud and its security aspects are being taken care of by SAP/Google. The
network is secured using the NextGen firewall, a VPN solution and multi-factor authentication for
connectivity across all locations and the Cloud Awareness communications and training on cyber
security are being imparted from time to time across the organisation.

 Regulatory Non-Compliance: The company’s legal team regularly monitors regulatory compliance,
assessing and maintaining the legal compliance environment in key jurisdictions. Compliance
activities are centrally monitored, facilitated by a system-based tool.

 Inefficient distribution and supply chain: To enhance transparency and track deliveries effectively,
the company is increasingly implementing digital solutions like GPS and Electronic Proof of Delivery
(EPOD) with geotagging capabilities.

8
Progress on sustainability
The company recognizes its responsibility towards our planet and people. It aspires to achieve the following
targets by the year 2030:

 25% Thermal Substitution Rate (TSR) (substitution of fossil fuels by alternative ones)
 50% of the total energy comes from renewable energy and Waste Heat Recovery Systems (WHRS)
 Achieved a 40% reduction in Scope 1 and 2 CO2 emissions, with the base year 2020-21. For this, the
company strives to enhance its sustainability performance in various areas.

 Energy management: Towards mitigating these inherent challenges, the company is building
renewable and waste heat recovery (RE/WHR) in its energy mix and also aims to reduce its specific
energy consumption (SEC) electrical as well as thermal.

 Water and Nature: Orient Cement is mindful of the water scarcity in the country and is tirelessly
working towards achieving ‘water security’. Some of the notable initiatives in this area are as follows:

 Reducing specific water consumption through process efficiency

• Adherence to ‘zero liquid discharge
• Enhanced utilisation of recycled water from the sewage treatment plant and waste treatment plant
• Water harvesting in mined-out pits
• Water harvesting initiatives in the nearby communities.

 Biodiversity: The company is conscious of its impact on biodiversity due to its mining operations.
Therefore, in coordination with the local forest officials, Orient Cement takes up mass plantation
activity across its locations by planting native and multi-culture species. The company achieved a
>90% survival rate in its plantation drive. These initiatives have resulted in the planting of
approximately 11,000 species during FY23.

 Circular Economy: The company is committed to the concept of circularity and is cognisant of its role
in reducing its environmental footprint, as we as its contribution to achieving ‘Energy Security’. To this
end, the company is enhancing its co-processing and pre-processing facilities at the Devapur and
Chittapur plants to co-process various waste materials, such as plastic waste, Refuse-derived fuel
(RDF) / Municipal Solid Waste (MSW), paper cups, cow dung, cloth waste and so on. During FY23, the
company co-processed various waste materials

9
Managerial Remuneration
During FY22-23, the median remuneration of employees increased by 9%. As of March 31, 2023, the total
management staff count on the rolls of the company stood at 855. The average percentile increase made in the
salaries of employees other than the managerial personnel in FY22-23 was below 11%. Keeping in view the
duties and responsibilities cast on the Managing Director & CEO and considering his knowledge of various
aspects relating to the company’s affairs, the percentile increase in the managerial remuneration for the same
financial year was 15%. It is hereby affirmed that the remuneration is as per the Remuneration Policy of the
company. During the year, the overall profitability of the company reduced by 51% compared to FY22.

Profitability Analysis (Rs Cr)

Particulars FY22 FY23 Change Comments/Analysis

Sales 2,725 2,937 8% Higher sales owing to increased volume and realization during the year.

Raw Materials/Others 386 354 9% Increase in cost due to higher volume, cost inflation and supply chain disruptions.

Gross Profits 1034 836 -19% Gross profits were lower due to higher operating expenses.

Increase in other operating expenses owing to increase in staff salary and other costs related to
Operating Expenses 444 471 6%
production.

Interest 51 38 -25% Lower interest cost due to repayment of long-term loans

EBIT 455 230 -50% Impacted by higher operating costs during the year.

PAT 263 123 -53% Impacted by higher operating costs during the year.

EPS 12.8 6 -53% EPS is in line with the profitability

Source: Company; Axis Securities

Exhibit 5: Volume and Growth Trend

7.00 30%
6.00
11% 20%
5.00 26% 3% 10%
4.00
3.00 0%
-9%
2.00 -12% -12% -12%
-10%
1.00 5.57 5.76 6.40 5.80 5.05 5.48 5.76
0.00 -20%
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Volume (mntpa) Volume growth

Source: Company, Axis Securities

10
Exhibit 6: Realization/tonne and Growth Trend

5600 15% 4975 5100 16.0%

4602
10.2% 14.0%
4800 3941 4176
3858 8.1% 12.0%
4000 3366 6.0% 10.0%
3200 8.0%
2.1% 2.5% 6.0%
2400 4.0%
1600 -1.4% 2.0%
0.0%
800 -2.0%
0 -4.0%
2017 2018 2019 2020 2021 2022 2023

Blended Realization/tonne (Rs.) Growth (%)

Source: Company, Axis Securities

Exhibit 7: Cost/tonne Trend

5000 4467 20.0%

3896
4000 3328 3453 3515 3512 15.0%
3047
3000 14.7% 10.0%
3.8% 10.9%
2000 1.6% 9.2% 1.8% 5.0%
-0.1%
1000 0.0%
0 -5.0%
2017 2018 2019 2020 2021 2022 2023

Cost/tonne (Rs.) Trend

Source: Company, Axis Securities

Growth Indicators (Rs Cr)

Particulars FY22 FY23 Change Comments/Analysis

Revenue 2,725 2,937 8% Higher sales owing to increased volume and realization during the year.

EBITDA 591 364 -38% Lower owing to higher operating costs during the year.

PAT 263 123 -53% Lower owing to higher operating costs during the year.

EPS 12.8 6 -53% EPS in line with the profitability

Volume
5.48 5.76 5% Volume growth owing to improved demand during H2FY23.
(mtpa)

Source: Company; Axis Securities

Profitability Margins
Particulars FY22 FY23 Change Comments/Analysis

Lower gross profit due to cost inflation as overall cost/tonne increased by 41% on a tonne
GPM 38% 28% -1000 bps
Basis.
EBITDA margin was impacted by the increase in Power & Fuel costs which shot up 41% on a per
EBITDAM 21.7% 12.4% -930 bps
tonne basis during the year.

PATM 10% 4% -600 bps Margin impacted due to higher costs

Source: Company; Axis Securities

11
Exhibit 8: Revenue and Revenue Growth Trend

Revenue & Revenue Growth

4000 2938 40%

1875 2222 2522 2725
2422 2324
20%
2000
24% 19% 13% 17% 0%
-4% -4% 8%
0 -20%
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Revenue (in crores) Revenue growth

Source: Company, Axis Securities

Exhibit 9: Blended EBITDA/tonne Trend

Blended Ebitda & Ebitda Growth

1500 66% 65% 100%

35%
1000 50%
-23% -8% -1%
500 0%
530 488 660 1090 1079 633 -41%
0 320 -50%
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Blended Ebitda/ton (Rs.) Blended Ebitda/ton growth

Source: Company, Axis Securities

Exhibit 10: Net Profit and NPM Trend

Net Profit & NPM

400 214 263 15.0%
200 87 9.2% 9.7% 123 10.0%
2.0%44 1.9%48 3.6%
4.2% 5.0%
0 -1.7%
0.0%
-200 -32 -5.0%
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Net Profit NPM

Source: Company, Axis Securities

Financial Ratios
Particulars FY22 FY23 Change Comments/Analysis

ROE 17% 8% -900 bps ROE declined as profitability impacted owing to higher operating costs.

ROCE 21% 11% -1000bps ROCE was impacted as EBIT was sharply lower during the year

Asset Turn 0.9x 1.0x 0.1x Asset turnover improved compared to the previous year as sales improved.

Net Debt/Equity 0.1x 0.1x - Remained flat as the company resorted to short-term borrowings

EV/EBITDA 5x 6x 1x EV/EBITDA was higher owing to lower EBITDA during the year.

Source: Company; Axis Securities

12
Exhibit 11: EV/EBITDA, ROE & ROCE Trend

25.0 50.0
20.0 18.0 21.2 40.0
30.0
15.0 10.7
8.2 16.4 11.3 20.0
8.7
10.0 2.9 7.7
4.3 4.5 17.3 10.0
7.7
5.0 -3.3
0.0
21.3 13.0 9.0 5.3 7.6 5.3 6.3
0.0 -10.0
2017 2018 2019 2020 2021 2022 2023

CHART-11 EV/EBITDA (x) ROE (%) ROCE(%)

Source: Company, Axis Securities

Exhibit 12: Book Value (Rs)

90
78
80 74
70 64
60 51 55
48 50
50
40
30
20
10
0
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Source: Company, Axis Securities

Exhibit 13: Leverage Ratio

7.00 6.21
6.00
5.00
3.62 3.84
4.00
2.87
3.00
2.00 1.201.12 1.11 1.08 1.16 1.14 1.02 0.98 1.15
0.60 0.10
1.00 0.48 0.16 0.02
0.06 0.06 0.08
0.00
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Total debt/Equity (x) Net debt/Equity (x) Net debt/EBITDA (x)

Source: Company, Axis Securities

13
Key Balance Sheet Takeaways

Working Capital Management

 Working capital days increased sharply in FY23 as the cash conversion cycle increased by 45 days
against 7 days in FY23. This was on account of higher inventory & debtors days and a decrease in
payable days. On an absolute basis, the working capital requirement increased and resulted in the
outflow of Rs 227 Cr against the outflow of Rs 55 Cr in FY22. During the year, OCF to EBITDA
decreased to 30% compared to 90% in FY22 owing to higher working capital requirements. However
from FY18-23 OCF/EBITDA conversion stood strong at 88%.

 From FY18-FY23, the company generated a total OCF of Rs 2,200 Cr and 20% of the total OCF (Rs
450 Cr) was utilized towards the company’s Capex program to meet medium-term to long-term plans.
Over this period, OCF remained the main source of funds for the company and it repaid the majority of
its debt out of the same. It has repaid long-term debt of Rs 984 Cr, adjusted for refinancing between
2017-23. During this period the company generated FCF of Rs 1620 Cr .

Cash Conversion Cycle

Particulars FY22 FY23 Change Comments/Analysis

Inventory Days 40 61 21 Inventory days increased owing to higher procurement of fuel as prices shot up

Trade Receivables 17 21 4 Increased owing to higher sales to the non-trade segment

Trade Payables 50 37 13 Decreased owing to tight credit terms from supplier

Cash Conversion Cycle 7 45 37 Overall CCC increased impacting working capital management adversely

Source: Company; Axis Securities

Exhibit 14: Cash Conversion Cycle

80 69
58 61
56
60 50
43 42 43 39 45 49 45
40 40 40 37
40 25 26 26
21 24 21
17 14 17
20 12 7
0
FY17 FY18 FY19 FY20 FY21 FY22 FY23
-20 -6

Trade Receivable Days Inventory Days Trade Payable Days Cas Coversion Cycle

Source: Company, Axis Securities

14
 Key Balance Sheet Takeaways (Contd...)
 Debt Levels: The company reduced its long-term debt by 34% during the year. However, to meet
working capital requirements, the company had to resort to short-term borrowings during the year.

 Fixed capital formation: Gross fixed capital formation improved from Rs 2,913 Cr in FY21 to Rs
2,948 Cr in FY23, an improvement of 2% as the company is setting up the WHRS plant and other
maintenance Capex.

 Cash & liquidity position: The cash/cash equivalent stood at Rs 69 Cr as of 31st Mar’23 compared to
Rs 53 Cr in FY22, an increase of 30% as the company resorted to short-term borrowings.

Exhibit 15: Cash & Cash Equivalent (Rs Cr)

160 151

120
83
80 70
54
33 29 36
40

0
FY17 FY18 FY19 FY20 FY21 FY22 FY23

Source: Company, Axis Securities

Exhibit 16: Gross & Net Block

4000
2729 2781 2859 2908 2948
3000 2495 2344 2341 2277 2187 2090 2083
2000

1000

0
FY18 FY19 FY20 FY21 FY22 FY23

Gross Block (Rs.Cr) Net Block (Rs. Cr)

Source: Company, Axis Securities

15
Key Cash Flow Takeaways
Particulars (Rs Cr) FY22 FY23 Change Comments/Analysis

PBT 404 192 -52% PBT was impacted owing to higher operating costs.

Non-cash expenses

Depreciation 145 147 1.3% An increase in Capex led to an increase in depreciation.

Reduction in finance cost due to repayment of debt and benefit of interest arbitrage through
Finance Cost 51 38 -25%
Refinancing.
Others -5 -5 - Remained flattish.

Working Capital Adjustments

CFO 524 111 -79% CFO was impacted due to higher requirements of working capital and lower profits.

CFI 70 -120 Decreased owing to Capex in WHRS and other projects related to efficiency.

CFF -586 352 Increased owing to short-term borrowings.

Capex -53 -130 145% Increase in Capex to set up WHRS and other efficiency Capex.

Free Cash Flow Generation 471 -2 Lower FCF owing to a decrease in cash from operations.

Source: Company; Axis Securities

Exhibit 17: OCF, Capex, FCF Trend (in Cr)

OCF.CAPEX, FCF (Rs. crores)

714 663
800
524 471
600
400 259 279 281 292 215
152 131 160 111
200
0
-200 -77 -51 -53 -19
-107 -148 -122 -130
FY17 FY18 FY19 FY20 FY21 FY22 FY23

OCF Capex FCF

Source: Company, Axis Securities

Exhibit 18: OCF, EBITDA, and Conversion Ratio Trend (Cr)

800 200%
145%
130%
600 150%
91% 90%
400 76% 100%
89%
30%
200 50%
259 178 279 305 281 312 292 383 714 551 524 591 111 365
0 0%
FY17 FY18 FY19 FY20 FY21 FY22 FY23

OCF EBITDA Conversion Ratio

Source: Company, Axis Securities

16
Forex Analysis
 During the financial year, the company has not earned any foreign exchange. The total foreign exchange outgo during the year
was Rs 209 Cr against Rs 55 Cr in FY22. This was on the back of higher fuel prices during the year. The company is not exposed
to foreign exchange risk and hence does not undertake any hedging activities.

Contingent Liability Analysis

Particulars (Rs Cr) FY22 FY23 Change Comments/Analysis

Excise duty and customs 7.80 7.69 -1.4% Related to CENVAT credit on Structural Steel and Differential Custom Duty on Steam Coal.
Related to the levy of Sales Tax on Debit Notes issued to Customers towards
Railway Freight Reimbursement and Levy of Entry Tax and Penalty
Sales Tax incl Entry Tax 10.60 8.9 -16%
thereon on Diesel and Lubricants etc purchased from outside
Telangana State is consumed for other than notified purposes.
Related to income tax appeals on the disallowance of ESOP expenses, depreciation,
Income Tax 11.37 10.38 -9%
and others.
The company paid Rs 10.1 Cr under protest while the appeal is pending before the
Electricity Duty 16.91 16.91 0 Supreme Court. For the balance amount, no provision has been considered based
on the legal opinion.
Others 16.83 17.10 1.6% Related to power fuel surcharge adjustment, deduction of liquidation damages and others.

Total 63.52 60.98 -2.54

Source: Company; Axis Securities

Related Party Transaction Analysis

Particulars (Rs Cr) FY22 FY23 Change Comments/Analysis

Birla Soft Limited 0.12 0.17 42% Purchase of service

C K Birla Corporate Services Ltd 8.10 8.15 0.061% Purchase of service

0.036 0.38 Purchase of goods

GMMCO Limited 0.004 0.22 Purchase of services
0.23 0.23 Payment of rent & office maintenance
Purchase of goods
0.2 0.17
HIL Limited Payment of rent & office maintenance
0.69 0.69

National Engineering Industries Ltd 0.243 0.00

Source: Company; Axis Securities

17
Corporate Social Responsibility

 People-oriented Approach and Community Development: Orient Cement is a people-

oriented company and has adopted fair employment practices that help create an
inclusive and conducive work environment. The company’s health and safety practices are
aligned with the company’s philosophy of "Work Safe-Live Safe". The company has also
undertaken several initiatives for community development across focus areas.
 Sustainable Waste Sourcing and Management: The team has entered into long-term
agreements with local municipalities for sourcing waste. AFRs like plastic waste, agro
waste, biomass, solid and liquid hazardous waste, etc. are all now part of its AFR
assortment. The team keeps a close watch and ensures compliance with specific
guidelines and regulations pertaining to different industries and waste generated
therefrom. The company’s plant R&D teams work closely to check the efficacy of waste
sourced at its NABL-accredited labs. The efficacy of waste material, solid or liquid, is
tested at its laboratories. Constant efforts are made to reach out and expand its basket of
waste to support its sustainability goals and also to optimize overall fuel costs.
 Employee Safety and Well-being: It is well-known that the cement industry is people-
intensive. Prioritizing safety during risk-prone times, it arranged for Covid-19 vaccines for
all its employees (including temporary workers), including the second and the
precautionary dose. Enhanced insurance coverage was arranged at significant financial
commitments. Also, safety protocols were strengthened across the workplace with more
than 19 safety training programs conducted. The best part being 72% of the employees
participated in these programs. In addition, the employees also participated in many small
group communication and safety awareness sessions.
 Commitment to Net Zero Carbon Future: The company’s roadmap to building a ‘Net
Zero Carbon Company’ by 2050, as a member of the Global Cement and Concrete
Association (erstwhile known as Cement Sustainability Initiative), is a testament to its
aspirations of building a carbon-neutral company and being an active participant in
mitigating global warming.
 Scaling up Renewable Energy and Waste Heat Recovery: The company’s roadmap to
scale up renewable energy and waste heat recovery for its power mix is targeted at
achieving 50% of such power in total power needs by 2030. As a first step, it has entered
into a long-term agreement for procuring solar energy at the Jalgaon grinding unit to meet
around 50% of its energy requirements there. The company has begun construction of a
10.1MW Waste Heat Recovery (WHR) system at the Chittapur unit, which will replace
fossil fuel, and give benefits in Perform, Achieve and Trade (PAT) and conservation of
natural resources. Both these initiatives will optimize costs and reduce its carbon footprint
significantly. Similar investments will also be made as it expands its cement capacity in the
upcoming years.
Corporate Governance Philosophy
The company upholds a strong and transparent governance framework to promote ethical values
and safeguard stakeholder interests. It has identified and addressed regulatory risks associated
with its business, establishing a robust framework for risk mitigation. Compliance with applicable
laws and regulations set by Stock Exchanges/SEBI, MoEFCC, SPCB, CPCB, and other statutory
bodies is a priority. Regular internal and external audits are conducted to enhance existing systems
and processes, ensuring continuous improvement.

18
Financials (Standalone)
Profit & Loss (Rs Cr)
Y/E Mar, Rs Cr FY23 FY24E FY25E
Net sales 2938 3206 3463
Other operating income 0 0 0
Total income 2938 3206 3463

Raw Material 386 411 440

Power & Fuel 928 874 927
Freight &Forwarding 787 866 926
Employee benefit expenses 166 176 187
Other Expenses 305 329 355

EBITDA 365 550 628

Other income 12 12 14

PBIDT 377 563 642

Depreciation 147 151 179
Interest & Fin Chg. 38 50 69
E/o income / (Expense) 0 0 0
Pre-tax profit 192 361 394
Tax provision 69 126 138
RPAT 123 235 256
Minority Interests 0 0 0
Associates 0 0 0
APAT after EO item 123 235 256
Source: company, Axis Securities

Balance Sheet (Rs Cr)

Y/E Mar, Rs Cr FY23 FY24E FY25E

Total assets 2877 3509 4035
Net Block 1943 2633 3157
CWIP 140 140 140
Investments 0 0 0
Wkg. cap. (excl cash) 305 214 231
Cash / Bank balance 69 82 53
Misc. Assets 419 440 456

Capital employed 2877 3509 4035

Equity capital 20 20 20
Reserves 1583 1798 2033
Minority Interests 0 0 0
Borrowings 98 498 773
Def Tax Liabilities 287 287 287
Other Liabilities and Provision 888 906 921
Source: company, Axis Securities

19
Cash Flow (Rs Cr)

Y/E Mar, Rs Cr FY23 FY24E FY25E

Profit before tax 192 361 394
Depreciation 147 151 179
Interest Expenses 38 50 69
Non-operating/ EO item -5 -12 -14
Change in W/C -227 91 -16
Income Tax 34 126 138
Operating Cash Flow 111 515 474
Capital Expenditure -130 -834 -693
Investments 10 0 0
Others -0.5 12.2 13.9
Investing Cash Flow -120 -821 -679
Borrowings 84 400 275
Interest Expenses -29 -50 -69
Dividend paid -46 -31 -31
Others 26 0 0
Financing Cash Flow 35 319 175
Change in Cash 26 13 -30
Opening Cash 43 69 82
Closing Cash 69 82 52
Source: company, Axis Securities

20
Ratio Analysis (%)

Y/E Mar FY23 FY24E FY25E

Operational Ratios
Gross profit margin 28% 33% 34%
EBITDA margin 12.4% 17.2% 18.1%
PAT margin 4% 7% 7%
COGS / Net sales 72% 67% 66%
Overheads/Net sales 16% 16% 16%
Depreciation / G. block 5.0% 4.0% 4.0%

Growth Indicators
Sales growth 8% 9% 8%
EBITDA growth -38% 51% 14%
PAT growth -53% 91% 9%

Efficiency Ratios
Total Asset Turnover (x) 1.0 0.8 0.8
Sales/Gross block (x) 1.0 0.8 0.8
Sales/Net block(x) 1.4 1.3 1.1
Working capital/Sales (%) 0.25 0.21 0.21

Valuation Ratios
PE (x) 18.3 12.2 11.2
P/BV (x) 1.4 1.6 1.4
EV/Ebitda (x) 6.3 6.0 5.7
EV/Sales (x) 0.8 1.0 1.0
MCap/ Sales (x) 0.8 0.9 0.8
EV/Tonne 33 47 51

Return Ratios
ROE 7.7 12.9 12.5
ROCE 11 17 16
ROIC 12 18 16

Leverage Ratios
Debt/equity (x) 0.1 0.3 0.4
Net debt/ Equity (x) 0.0 0.2 0.4
Debt service coverage ratio (x) 2.9 5.1 5.8
Interest Coverage ratio (x) 6.1 8.2 6.7

Payout ratio (Div/NP) 25 13 12

AEPS (Rs) 6.0 11.5 12.5
AEPS Growth (%) -53% 91% 9%
CEPS (Rs) 13 19 21
DPS (Rs) 1.5 2 2
Source: company, Axis Securities

21
 Orient Cement Price Chart and Recommendation History

(Rs)

Date Reco TP Research

25-Jun-21 BUY 180 Initiating Coverage
16-Jul-21 BUY 180 AAA
04-Aug-21 BUY 205 Result Update
01-Sep-21 BUY 180 Result Update
01-Oct-21 BUY 205 Result Update
26-Oct-21 BUY 205 Result Update
02-Feb-22 BUY 200 Result Update
12-May-22 BUY 160 Result Update
12-Jul-22 BUY 140 AAA
02-Aug-22 BUY 130 Result Update
11-Nov-22 HOLD 135 Result Update
03-Feb-23 HOLD 130 Result Update
04-May-23 BUY 150 Result Update
17-Jul-23 BUY 165 Result Update

Source: Axis Securities

22
About the analyst

Analyst: Uttam Kumar Srimal

Email: uttamkumar.srimal@axissecurities.in

Sector: Cement/Infra

Analyst Bio: Uttam K Srimal is PGDBF from NMIMS with 20 years of experience in Equity
Market/Research.

About the analyst

Analyst: Shikha Doshi

Email: shikha.doshi@axissecurities.in

Sector: Cement/Infra

Analyst Bio: Shikha Doshi is Master of Science in Finance from Illinois Institute of Technology, Chicago,
currently handling Cement/infra sector.

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

1. Axis Securities Ltd. (ASL) is a SEBI Registered Research Analyst having registration no. INH000000297. ASL, the Research Entity (RE) as defined in the Regulations, is
engaged in the business of providing Stock broking services, Depository participant services & distribution of various financial products. ASL is a subsidiary company of Axis
Bank Ltd. Axis Bank Ltd. is a listed public company and one of India’s largest private sector bank and has its various subsidiaries engaged in businesses of Asset management,
NBFC, Merchant Banking, Trusteeship, Venture Capital, Stock Broking, the details in respect of which are available on www.axisbank.com.
2. ASL is registered with the Securities & Exchange Board of India (SEBI) for its stock broking & Depository participant business activities and with the Association of Mutual Funds
of India (AMFI) for distribution of financial products and also registered with IRDA as a corporate agent for insurance business activity.
3. ASL has no material adverse disciplinary history as on the date of publication of this report.
4. I/We, Uttam Srimal, (MBA-Finance) and Shikha Doshi (Master of Science in Finance), author/s and the name/s subscribed to this report, hereby certify that all of the views
expressed in this research report accurately reflect my/our views about the subject issuer(s) or securities. I/We (Research Analyst) also certify that no part of my/our
compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. I/we or my/our relative or ASL does not have any financial
interest in the subject company. Also I/we or my/our relative or ASL or its Associates may have beneficial ownership of 1% or more in the subject company at the end of the
month immediately preceding the date of publication of the Research Report. Since associates of ASL are engaged in various fi nancial service businesses, it might have
financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. I/we or my/our relative or ASL or its associate
does not have any material conflict of interest. I/we have not served as director / officer, etc. in the subject company in the last 12-month period.Any holding in stock – No
5. 5. ASL has not received any compensation from the subject company in the past twelve months. ASL has not been engaged in market making activity for the subject company.
6. In the last 12-month period ending on the last day of the month immediately preceding the date of publication of this research report, ASL or any of its associates may have:

Received compensation for investment banking, merchant banking or stock broking services or for any other services from the subject company of this research report and / or;

Managed or co-managed public offering of the securities from the subject company of this research report and / or;

Received compensation for products or services other than investment banking, merchant banking or stock broking services from the subject company of this research report;

ASL or any of its associates have not received compensation or other benefits from the subject company of this research report or any other third-party in connection with this report.

Term& Conditions:

This report has been prepared by ASL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to,
copied or distributed, in part or in whole, to any other person or the media or reproduced in any form, without prior written consent of ASL. The report is based on the facts, figures and information that are considered true,
correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been
independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated
to all the customers simultaneously, not all customers may receive this report at the same time. ASL will not treat recipients as customers by its receiving this report.

23
 DEFINITION OF RATINGS

Ratings Expected absolute returns over 12-18 months

BUY More than 10%

HOLD Between 10% and -10%

SELL Less than -10%

NOT RATED We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation

UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events

NO STANCE We do not have any forward looking estimates, valuation or recommendation for the stock

Disclaimer:

Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to the
recipient’s specific circumstances. The securities and strategies discussed and opinions expressed, if any, in this report may not be suitable for all investors, who must
make its own investment decisions, based on its own investment objectives, financial positions and needs of specific recipient.

This report may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this report should make such investigations as
it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this report (including the merits and risks
involved), and should consult its own advisors to determine the merits and risks of such an investment. Certain transactions, including those involving futures, options
and other derivatives as well as non-investment grade securities involve substantial risk and are not suitable for all investors. ASL, its directors, analysts or employees
do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report,
including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income,
etc. Past performance is not necessarily a guide to future performance. Investors are advice necessarily a guide to future performance. Investors are advised to see
Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in
projections. Forward-looking statements are not predictions and may be subject to change without notice.

ASL and its affiliated companies, its directors and employees may; (a) from time to time, have long or short position(s) in, and buy or sell the securities of the
company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities or earn brokerage or other compensation or act as a market maker
in the financial instruments of the company(ies) discussed herein or act as an advisor or investment banker, lender/borrower to such company(ies) or may have any
other potential conflict of interests with respect to any recommendation and other related information and opinions. Each of these entities functions as a separate,
distinct and independent of each other. The recipient should take this into account before interpreting this document.

ASL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this
report should be aware that ASL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based
on any specific merchant banking, investment banking or brokerage service transactions. ASL may have issued other reports that are inconsistent with and reach
different conclusion from the information presented in this report. The Research reports are also available & published on AxisDirect website.

Neither this report nor any copy of it may be taken or transmitted into the United State (to U.S. Persons), Canada, or Japan or distributed, directly or indirectly, in the
United States or Canada or distributed or redistributed in Japan or to any resident thereof. If this report is inadvertently sent or has reached any individual in such
country, especially, USA, the same may be ignored and brought to the attention of the sender. This report is not directed or intended for distribution to, or use by, any
person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject ASL to any registration or licensing requirement within such jurisdiction. The securities described herein may or
may not be eligible for sale in all jurisdictions or to certain category of investors.

The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. The company reserves the right to make modifications and alternations to this document as may be required from time to time without
any prior notice. The views expressed are those of the analyst(s) and the company may or may not subscribe to all the views expressed therein.

Copyright in this document vests with Axis Securities Limited.

Axis Securities Limited, Dealing office: 1st Floor, I-Rise Building, Q Parc, Loma Park, Thane, Ghansoli, Navi Mumbai-400701, Regd. off.- Axis House,8th Floor, Wadia
International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400 025. Compliance Officer: Anand Shaha, Email: compliance.officer@axisdirect.in, Tel No: 022-
49212706

NEERAJ Digitally
by NEERAJ
signed

CHADA CHADAWAR
Date:
24
WAR 2023.07.17
08:43:57 +05'30'