RHI Magnesita India Analysis

dividend

Pros

• Dividends paid are well covered by earnings (3.1x coverage).
• Orient Refractories's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Dividend payments have increased, but Orient Refractories only paid a dividend in the past 8 years.
• Whilst dividend payments have been stable, Orient Refractories has been paying a dividend for less than 10 years.
• Orient Refractories's dividend is below the markets top 25% of dividend payers in India (3.08%).

health

Pros

• Orient Refractories is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Orient Refractories is profitable, therefore cash runway is not a concern.
• Orient Refractories is profitable, therefore cash runway is not a concern.
• Orient Refractories has no debt, it does not need to be covered by operating cash flow.
• Orient Refractories has no debt, it does not need to be covered by short term assets.
• Orient Refractories's cash and other short term assets cover its long term commitments.
• Orient Refractories has no debt compared to 5 years ago when it was 2.9%.
• Orient Refractories has no debt, therefore coverage of interest payments is not a concern.
• Orient Refractories has no debt.

Cons

• High level of physical assets or inventory.

management

Pros

• The tenure for the Orient Refractories board of directors is about average.
• Parmod's remuneration is about average for companies of similar size in India.
• Parmod's compensation has been consistent with company performance over the past year, both up more than 20%.
• The average tenure for the Orient Refractories management team is over 5 years, this suggests they are a seasoned and experienced team.

Cons

misc

Pros

Cons

• Orient Refractories is not covered by any analysts.
• Orient Refractories has significant price volatility in the past 3 months.

past

Pros

• Orient Refractories's year on year earnings growth rate has been positive over the past 5 years.
• Orient Refractories used its assets more efficiently than the IN Basic Materials industry average last year based on Return on Assets.
• Orient Refractories has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).

Cons

• Orient Refractories's 1-year earnings growth is less than its 5-year average (1.1% vs 14.2%)
• Orient Refractories's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Orient Refractories's earnings growth has not exceeded the IN Basic Materials industry average in the past year (1.1% vs 17%).

value

Pros

• NSEI:ORIENTREF is up 10% along with the Basic Materials industry (9.2%) over the past month.
• NSEI:ORIENTREF is up 10% outperforming the market in India which returned 8% over the past month.

Cons

• Orient Refractories's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Orient Refractories's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Orient Refractories is overvalued based on assets compared to the IN Basic Materials industry average.
• Orient Refractories is overvalued based on earnings compared to the IN Basic Materials industry average.
• Orient Refractories is overvalued based on earnings compared to the India market.
• ORIENTREF underperformed the Basic Materials industry which returned -15.5% over the past year.
• ORIENTREF underperformed the Market in India which returned -14.5% over the past year.