OCL India: Value and Growth Stock

Apr 28, 2017

OCL India is a leading cement player in Eastern India. Refractory product is exported globally and used domestically as well.



  • OCL India is a Dalmia group of companies.
  • Cement capacity is 5.35 Million TPA Mill at two locations of Rajgangpur and Kapilas. Both places are in Odisha.
  • Konark Brand is a well known cement brand.
  • OCL holds 92 patents in India and abroad for refractory products and processes. Products developed through OCL's own R&D efforts are noted for their excellent quality and performance.
  • Refractory business cater mainly to steel companies.
  • Revenue segment: 91% cement and 8% refractories.
  • Consistent dividend paying.
  • Long term sales and profit growth.
  • Nov, 2016: Dalmia Bharat and OCL India plan to merge to create cement giant.
    http://www.moneycontrol.com/news/business/stocks-business/buy-ocl-india-targetrs-647-emkay-1025170.html
  • Apr 2016: OCL India inaugurates 5.5MW captive solar power plant in Bengal,
  • Dec 2016: OCL India Ltd. (BSE: 502165 | NSE: OCL), a Dalmia Bharat Group company has been awarded as the fastest growing cement company in the small cement manufacturers in India category at the 2nd Indian Cement Review awards organized by Indian Cement Review magazine and Cement Manufacturers Association on the sidelines of Cement Expo 2016, in Mumbai.

CMP: Rs 1012
PE: 13.85.


According to this link (Oct 4, 2016. Price that time Rs 887), OCL can rise 50%.


13 Oct 2016: With reference to news flashed on CNBC TV 18 dated October 10, 2016 stating "Shiva cement in talks with OCL India ltd to sell its inaugurated cement plant in Orissa".

It market Cement in Odisha, WB, Bihar and JH.

July 2016: Dalmia Bharat Hires International Talent to Strengthen Refractories Business. (The Refractory business of Dalmia Bharat Group comprises two specialty companies - OCL Refractories and Dalmia Refractories Limited. Established in 1954 as a unit of OCL India, OCL Refractories is a leading refractory supplier to domestic and international steel plants.)

Cement:

6.7 MnT capacity. 80% capacity is in Odisha.


Post restructuring:
Capacity will be 9.3MnT, in which 2.6MnT capacity will be Bokaro.
It will help cheaper raw material and addressing growing market of Bihar and Jh.


Company increased the use of blast furnace slag (steel industry waste) by replacing clinker.
From 56% in 2014-2015 to 64% 2015-2016.


Fuel mix:
Company increased the usage of Pet Coke by replacing costly coal. This has helped saving of 23% in power and fuel cost per tonne.
All the effort has resulted in possibly lowest carbon footprint for cement production.
Cement market share rose to 11% from 8% in 2014.
Dalmia DSP launched especially for Dhalai. The name changed from Konark DSP to Dalmia DSP for better brand visibility.
Branding together – Dalmia and OCL Konark has resulted in 19% sales volume growth in two years.
Premium brand contributed to 22% sales. This may rise to 40% post Bokaro amalgamation.

Post amalgamation, logistic saving can happen. Even today, 26% of its cost of production is logistic which is lowest for cement company.


Refractories:
1.31 Lakh tonnes per annum. Address five continents.

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Cement demand growth in Eastern India is higher than national average. 5 years CAGR is 7% for Eastern India. National growth rate is 5%.

Cement consumption is also very low in Eastern India 150 kg compared to national average of 220 kg.


The company has included Information technology to help reach to its customers (dealers).

SM@RT (Sales management at real time), SUVIDHA and Project Kushal was launched.
Using SUVIDHA, company can track demand from dealers and dealers can track their account.

April 22, 2017: Birla Mutual Funds buys 8.7 lakh shares of Dalmia Bharat.


Shareholding:
Promoters: 74.89%
Public: 11.96%
FII: 0.13
Others: 12.72%

FII: 0.52% in FY15 to 2.17% in FY16.




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