Our 16th company in the Series of Best Stocks Below Rs. 50 is Orient Abrasives Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Orient Abrasives Limited is a company engaged in the production and selling of fused aluminum oxide grains, calcined products and generation of power.
Now Let’s check the important fundamental figures of this company. This is a small cap company with Market Cap ₹365cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 32.12
Sector PE Ratio: 15.43
PE Ratio of this company is high but better than Sector’s PE. So it’s a Below Average PE than the peers of this company.
PB Ratio : 1.51
Sector PB Ratio : 2.85
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.49%
Sector Dividend Yield : 2.24%
Dividend Yield of this company is low than Sector. Dividend of this company is Below Average than the peers of this company.
ROE: 4.69%
ROCE: 8.46%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 304.15 | 11.38 |
| 2020 | 347.85 | 20.55 |
| 2019 | 314.59 | 16.17 |
| 2018 | 327.37 | 16.99 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 97.63 | 115.29 | 144.56 | 155.81 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021, Company have 97.63 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 25.45 | 31.93 | 0.24 | -5.97 |
Debt Level: Orient Abrasives Ltd net debt to equity ratio (6.4%) is considered satisfactory.
Reducing Debt: Orient Abrasives Ltd debt to equity ratio has reduced from 17.6% to 11.4% over the past 5 years.
Debt Coverage: Orient Abrasives Ltd debt is well covered by operating cash flow (36.9%).
Interest Coverage: Orient Abrasives Ltd interest payments on its debt are well covered by EBIT (6.2x coverage).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 63.58% | 13.23% | 0.00% | 0.00% | 23.19% |
| Mar 2021 | 63.58% | 13.23% | 0.00% | 0.00% | 23.19% |
| Dec 2020 | 63.58% | 13.23% | 0.00% | 0.00% | 23.19% |
| Sep 2020 | 63.58% | 13.23% | 0.00% | 0.00% | 23.19% |
Above table showing there is no big change in Promotors holding which is 63.58% in June 2021. FIIs invested in June 2021 with 13.23% and retail investor is 23.19%.
Investment Checklist for Orient Abrasives Ltd.
- The company is currently profitable
- Profit margins (2.6%) are lower than last year (4.3%)
- Does not have a meaningful market cap (₹4B)
- Earnings have grown by 4.6% per year over past 5 years
- Debt level is low and not considered a risk
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- At least 3 years of financial data is available
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹3B)
- Orient Abrasives Ltd does not have negative shareholders equity.
According to its historical performance we can predict stock target.
[membership_protected_content user=non-member]
Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 25 to 28
Target: 40 ( 40% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
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Hope you liked Our 16th company in the Series of Best Stocks Below Rs. 50. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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