Orient Abrasives :FV Rs1 : Excellent stock to accumulate at CMP of Rs 21-23

About Company :Orient Abrasives Limited, an ISO 9001 Quality Certified Company, is engaged in the business of manufacturing and selling Calcined and Fused Alumina Products; Refractories and Monolithics.

 Company enjoys the position of being the largest producer of Calcined and Fused Products in India. An ISO 9001 certification and a strong management have led the way for the Company to become a large organization, recognized for its quality offerings.

The Company offers a wide range of Refractory and Monolithic products for the iron and steel industry and enjoy large domestic and international clientèle

Factory : 1. Porbandar,Gujrat    2. Bhiwadi,Rajasthan

Key Customers:

The key Indian customers procuring these raw materials from the Company include:

Grinding wheel manufacturers including Grindwell Norton (Saint Gobain Abrasives) and Carborundum Universal;

Refractory manufacturers including Bharat Refractories, Tata Refractories, OCL India, Vesuvius India, Orissa Industries, ACE Refractories, VRW Refarctories, SKG Refractories, IFGL, Sarvesh Refractories and Maithan Ceramics.

Customers for refractory division

Steel Authority of India, Mukund Steel, Tata Iron and Steel Company, RINL – Vizag, Sunflag Iron, Lloyd Steel, Essar Steel and the Jindal Group.

Auditors of Company: S.R.Batliboi (EY)

Out look : With recessionary fears almost over stock looks technically bottom out from all time low created last year of 16.6.But it has not gone up in comparison to rest of stocks stocks.Looking at last 3 quarter performance the profit almost got doubled.Going forward demand for company's product can only rise with increase in demand and revival of cement,steel industry.

Company has strong fundamentals and niche products with improvement in margins the profitability can only go up from here on.Latest results are supporting the margin improvement and profitability.It has consistent dividend paying record last year it paid dividend of 20% expecting increase dividend this year due to improved performance

I feel the company in next 2 year can touch historical highs of Rs 60 with on going improvement in revenue , profitability and margins.

One may start accumulating this tortoise of stock at existing levels of Rs 21-22 for excellent returns in long term a slow and steady winner .