ORIENT ABRASIVES LTD - Quantamental Equity Research Report

	Quantamental Equity Research on ORIENT ABRASIVES LTD | Release: 01 Dec 2018 17:28:38 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:ORIENTABRA and BSE CODE:504879
	Last Close:	INR 28.75
	Fair Value:	INR 14.7
	Est. Price by Mar 19:	INR 28.15
	Market Capitalization (INR Crs):	343.85
	Industry:	Other Industrial Products
	Rating:	NEUTRAL
	Downside:	-2%
	Company Profile
	Orient Abrasives Limited is an India-based company, which is engaged in the manufacturing of fused grains, monolithics and calcined products.
	Growth Per Share
	Particulars	1-Year	3-Year	5-Year
	Revenue %	48%	58%	71%
	EBIT %	83%	28%	-2%
	Earnings %	142%	38%	7%
	Book Value %	7%	26%	37%
	Stock Total Return %	9%	65%	303%
	Share holding pattern
	Particulars	%age
	(A) Promoter & Promoter Group	63.57
	(B) FII/FPI	13.23
	(C) DII/Insurance Companies	0.01
	(D) Public holding < 2 lakhs of cap.	15.16
	(E) Others	8.03
	Grand Total	100.00
	Fundamentals (Historical and Estimated)
	Particulars	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	Mar-16	Mar-17	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Price	33	38	7	10	20	25	47	37	41	28	31	35	38	40
	Return on Equity	34%	25%	7%	11%	5%	8%	13%	4%	9%	8%	8%	8%	8%	8%
	Price to Earning	7.7	9.6	9.5	7.6	33.7	24.0	24.1	63.9	28.8	21.5	21.5	21.5	21.5	21.5
	EVTI	1.4	1.5	0.9	0.8	1.5	1.8	2.1	2.3	1.7	1.2	1.2	1.3	1.3	1.3
	EVTIFM	7.7	9.6	9.5	7.6	33.7	24.0	24.1	63.9	28.8	21.5	21.5	21.5	21.5	21.5
	Price to Book Value	2.6	2.4	0.7	0.8	1.6	1.9	3.2	2.5	2.5	1.6	1.7	1.7	1.7	1.8
	Debt to Equity	0.4	0.5	0.4	0.2	0.2	0.2	0.2	0.3	0.3	0.2	0.0	0.0	0.0	0.0
	Dividend Yield	3%	3%	3%	3%	1%	1%	1%	1%	1%	1%	1%	1%	1%	1%
	Cash Flow to Firm	7%	1%	77%	27%	7%	4%	2%	-1%	1%	13%	11%	9%	9%	8%
	Detailed Estimates
	Title	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Sales	323.68	307.46	299.75	299.74	307.23	322.59
	EBITDA	35.00	38.95	37.97	37.97	38.92	40.86
	EBIT	25.46	29.89	29.52	30.08	31.56	34.00
	PBT	19.33	23.76	26.23	29.37	31.56	34.00
	NPAT	16.99	15.67	17.30	19.38	20.82	22.43
	Price to Earning	28.76	21.46	21.46	21.46	21.46	21.46
	Price to Book Value	2.50	1.61	1.67	1.74	1.75	1.76
	Debt to Equity	0.31	0.16	0.03	-	-	-
	Return on Equity	0.09	0.08	0.08	0.08	0.08	0.08
	Enterprise Value to Total Income (EVTI)	1.68	1.18	1.24	1.31	1.31	1.29
	Enterprise Value to Total Income to Firm Margin(EVTIFM)	29.34	23.91	24.82	25.69	25.08	24.15
	Price or Est. Share Prices	40.83	28.15	31.10	34.85	37.50	40.40
	DISCOUNTED CASH FLOW
	Title	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	PBT	23.76	26.23	29.37	31.56	34.00
	Interest	6.13	3.29	0.71	-	-
	Depreciation	9.06	8.45	7.89	7.36	6.86
	Cash Flow Before Tax	38.95	37.97	37.97	38.92	40.86
	Tax Rate	33.99	33.99	33.99	33.99	33.99
	Cash Flow After Tax	25.71	25.07	25.06	25.69	26.97
	Terminal Cash Flow	-				172.78
	Total Cash Flow	25.71	25.07	25.06	25.69	199.75
Present Value of Cash Flow					175.46
Debt					-
Value of Equity					175.46
Fair Value Per Share					14.70
Equity					344
Debt					61
Beta	Take from Reuters				0.86
Risk Free Rate	Prevailing Yield in India				8%
Market Risk Premium	Assuming 8.82% premium for Equity Investments				9%
Interest Paid					6
Tax Benefit					1
Interest Net of Tax					5
Debt					61
Cost of Debt					9%
Cost of Equity					15%
Debt Weight					15%
Equity Weight					85%
WACC					14%
Cash Flow of Mar-23 E					26.97
Growth					1.0%
Present Value of Terminal Cashflow					172.78
Peer Comparision
#	Name	CMP Rs.	Mar Cap Rs.Cr.	B.V. Rs.	Annualized ROE %	ROCE %	Latest EVTI	Latest EVTIFM	CMP / BV	P/E	Debt / Eq	Div Yld %	Growth Rate R %	SGR %	Ann Total Income	PQEIOI	QoQ Sales %	Qtr Sales Var %	QoQ Profits %	Qtr Profit Var %	Graham's Number Rs.
1	Carborundum Uni.	362.25	6,848	87.90	20.04	20.44	2.47	33.16	4.12	27.68	0.08	0.62	16.09	15.84	2,698	42.33	143	3.98	12.35	-3.92	7.32
2	Grindwell Norton	491.15	5,438	90.99	20.52	23.19	2.96	34.37	5.40	32.21	-	1.02	12.93	12.97	1,687	58.36	152	9.36	21.03	-6.79	12.98
3	Wendt India	3,048.45	610	647.20	19.03	16.16	3.39	37.21	4.71	33.55	-	0.82	11.78	12.84	170	79.74	161	-1.82	12.67	-14.34	73.58
4	Orient Abrasives	28.75	344	17.25	6.78	10.38	1.80	22.99	1.67	20.43	0.31	0.87	5.59	6.91	222	63.57	199	-38.39	-26.36	-28.27	23.39
5	Welcast Steels	698.00	45	528.93	9.38	7.75	0.17	20.96	1.32	48.03	0.15	0.29	8.61	7.25	295	74.85	97	14.08	46.97	454.55	12.96
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