Orient Cement shares headed for 37% downside ahead of Adani acquisition?

Brokerage firms remain largely negative on Orient Cement after the company reported a muted set of performance in the March 2024 quarter amid the delays in the transfer of stake to Adani Group. Analysts tracking the stock see up to 37 per cent downside in the stock.

Orient Cement reported a 38.31 per cent YoY fall in its net profit at Rs 42.07 crore in the quarter March ended on March 31, 2025. Its sales slumped 7.08 per cent YoY to Rs 825.19 crore, while Ebitda dropped 28.88 per cent to Rs 110.68 crore for the reported quarter.

Shares of Orient Cement remained range bound post quarter earnings as the stock dropped 2 per cent to Rs 351.25, against its previous close at Rs 358. The stock turned flat eventually. The company commanded a total market capitalization closer to Rs 7,350 crore for the day.

Orient Cement's company board has declared a dividend of Rs 0.50 per share for the year ended 31st March 2025, which shall be paid/dispatched to the shareholders within 30 days of declaration. However, the record date is yet to be announced.

Elara Capital expects Orient Cement's performance to improve further, supported by better demand, expected synergy benefits from the Adani Group and operating leverage. However, its significant exposure to the oversupplied South may continue to weigh on overall performance, it said.

While the expected open offer may establish a near-term floor for the stock, the current price offers limited arbitrage opportunity. Orient Cement's significant exposure to the oversupplied South could remain a long-term overhang, said Elara. "We maintain our 'sell' rating with an unchanged target price of Rs 225 and largely retain our estimates," it added.

In October 2024, Adani Group-owned Ambuja Cements had entered into a share purchase agreement with Orient Cement's promoter group and certain other shareholders to acquire 46.80 per cent stake at Rs 394.5 apiece. The agreement had received the approval from Competition Commission of India (CCI) on March 4, 2025. However, the transfer is yet to be executed.

Ambuja Cement may announce expansion in Orient Cement and focus on improving profitability post acquiring controlling stake, said Antique Stock Broking. "Factoring better profitability under new ownership, we raise our FY26-27E EBITDA by 6-7 per cent and increase our target price to Rs 320 (earlier Rs 295) based on unchanged 10x FY27E EV/EBITDA," it added with a 'hold' tag.