Target: ₹163CMP: ₹136Orient Cement reported Q1FY27 consolidated EBITDA of about ₹140 crore, declining about 21 per cent year on year, ahead of our estimates of about ₹110 crore. Sales volume declined about 21 per cent to about 1.5 million tonne, about 5 per cent below our estimate, marking the company’s first double-digit volume decline since September 2024.The sharp decline was primarily driven by its strategic exit from non-remunerative markets, with the management prioritising profitability over market share. Blended realisation fell about 12 per cent at ₹4,027/tonne. Cement realisation after subtracting freight outward improved 9 per cent.Operating cost per tonne declined about 15 per cent to about ₹3,067, driven by lower raw materials consumption and a sharp reduction in other operating expenses. The sharp moderation in operating cost more than offset the impact of weaker realisation While near-term performance is likely to remain subdued by seasonally-weak demand and soft pricing during the monsoon, we expect volume to recover post monsoon, supported by the Adani Group synergies and its extensive distribution network. Continued cost optimisation initiatives are set to support margin recovery.In addition, the proposed merger with the parent company, set to be completed in FY27, should provide more flexibility in use of cashflow. We raise our EBITDA estimates by about 1 per cent for FY27 while keeping them unchanged during FY28-29E, due to improvement in cost structure. We reiterate Accumulate with a TP of ₹163. Published on July 30, 2026