homebusiness Newscompanies NewsNeed more price hikes to improve operational performance: Orient Cement
Need more price hikes to improve operational performance: Orient Cement
Hyderabad-based Orient Cement is looking at more price hikes to improve the operating performance even as the company recently increased prices by ₹20 per bag,
Hyderabad-based Orient Cement has recently seen a notable improvement in its pricing, with a 5-6% increase in October, amounting to over ₹20 per bag. This development marks a positive shift from the trends observed in the first half of the year and the past year.
The company is optimistic about this trend, looking forward to further price hikes to bolster its financial standing.
Deepak Khetrapal, MD & CEO of Orient Cement, said "In October, prices have certainly looked better than what we had in the H1 or rather the last year almost. The increase is about 5-6%, which, with GST, turns out to be over ₹20 a bag,"
He believes that if this trend continues, the company can expect an EBITDA (earnings before interest, tax, depreciation, and amortisation) of ₹1,000 per tonne in the second half of the year, despite a potential dip in the third quarter.
Khetrapal acknowledged the company's need for further price hikes and remains hopeful for such opportunities. "We certainly need them, we hope we get an opportunity to hike the prices," he stated, emphasizing the importance of sustaining the current price level to meet target numbers.
On September 25, DAM Capital released a report highlighting the favourable pricing dynamics for cement companies in southern India. The industry continued to exhibit pricing strength in September, primarily driven by eastern India. Experts suggested the demand for cement has improved given it is the pre-election year, when political as well as infrastructure projects often stimulate demand.
Orient Cement reported a significant increase in revenue, up by 17.2% to ₹721 crore from ₹615 crore. The company also saw a 15% increase in volume, reaching 1.425 million tonnes from 1.24 million tonnes. EBITDA surged by 168% to ₹86.75 crore, compared to ₹32.35 crore in the previous year, with the margin improving to 12.03% from the previous year's 5.26%.
The market cap of Orient Cement is ₹4,371.90 crore and it competes with industry rivals such as Grasim Industries, Dalmia Bharat and Ramco Cements.
(Edited by : Shweta Mungre)
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