Buy Orient Paper & Industries Ltd - Emkay

Reco: BUY
CMP: Rs 52
Target Price: Rs 82

Cement performance surprises positively

- EBITDA at Rs892 mn (+20.4% yoy), above est (Rs723mn) led by cement division. Cement revenues grew 51% yoy (Rs3.5) bn volumes jump 24% yoy, realizations improve 22%

- Paper division continues to report losses (Rs153mn).However new CPP of 50 MW to be commissioned in 3 months would drive cost efficiencies & help division turnaround

- Upgrade earnings estimate for FY12/13 by 8.3%/1.6% led by better performance from cement division. Higher energy prices in FY13 for paper division cap FY13 upgrade

- De-merger of cement business to trigger much awaited value unlocking process. Stock trades at undemanding valuation of 4.5x FY13 PER & EV/E of 2.7X. BUY - target price of Rs82.

Source : Equity Bulls

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