Fund Manager Summary
The fund managers believe that Orica Ltd presents a compelling margin recovery opportunity driven by improved commercial discipline and industry supply constraints. Their recent visits to manufacturing operations in Peru and Canada have bolstered their confidence in the company’s potential for incremental growth through the adoption of electronic and wireless detonators over the medium to long term. The completion of the SAP enterprise management system has further enhanced the linkage of manufacturing with commercial outcomes. While the current industry trends are supportive, the fund managers remain cautious of price-based competitive pressures. Overall, they maintain a positive outlook on Orica's near-term reversionary opportunities and long-term value creation potential.
Source: Trading View
Commentary From The Managers
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Equity Trustees Asset Management
30 June 2025
$19.49
Summary
- Orica is recognized as a leading provider in mining and infrastructure solutions.
- The company reported a first half FY25 profit that exceeded expectations by approximately 11%.
- Strong performance was particularly noted in the Asia-Pacific & Asia division, driven by better recontracting.
- Equity Trustees Asset Management believes that the focus on Research and Development is yielding positive results.
- Investments in technology are addressing challenges such as greater mine depth and higher strip ratios.
- The Ammonium Nitrate market remains tight, indicating a favorable environment for growth.
- There is an increasing adoption of technology solutions within the industry.
- The company is optimistic about growth prospects across all regions and segments.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Equity Trustees Asset Management
30 June 2025
$19.49
- Orica is recognized as a leading provider in mining and infrastructure solutions.
- The company reported a first half FY25 profit that exceeded expectations by approximately 11%.
- Strong performance was particularly noted in the Asia-Pacific & Asia division, driven by better recontracting.
- Equity Trustees Asset Management believes that the focus on Research and Development is yielding positive results.
- Investments in technology are addressing challenges such as greater mine depth and higher strip ratios.
- The Ammonium Nitrate market remains tight, indicating a favorable environment for growth.
- There is an increasing adoption of technology solutions within the industry.
- The company is optimistic about growth prospects across all regions and segments.
Summary
Wilson Asset Management
12 June 2025
$19.01
- Orica is exempt from tariffs, benefiting as a global operator.
- Miners are delaying capex and focusing on cost efficiencies, increasing demand for Orica’s value-added product suite.
- There is strong earnings momentum, supported by a buoyant recontracting cycle and contributions from acquisitions.
- Orica remains inexpensive from a market flow perspective.
- After a period of capital raisings, Orica is now in a capital return phase, likely to support the share price.
Summary
Equity Trustees Asset Management
31 Dec 2024
$16.58
- Equity Trustees Asset Management notes that ORI’s share price experienced a sell-off after the AGM commentary in December.
- The market had anticipated a more positive update regarding ORI’s performance.
- Management highlighted a strong start to the year and ongoing progress in executing their strategy.
- Equity Trustees Asset Management continues to hold the investment due to confidence in the company’s diversification of revenues.
- The firm believes that ORI offers a strong growth outlook at a reasonable valuation.
Summary
Yarra Capital Management
30 June 2024
$17.67
- Yarra Capital Management continues to hold an underweight position in Orica Ltd (ORI).
- The fund prefers Incitec Pivot (IPL) over ORI from a chemicals exposure perspective.
- There are improvements in visibility of earnings growth for ORI, including repricing low margin contracts.
- ORY's premiumization strategy in detonators is noted.
- However, the stock is considered to have already factored in these benefits.
- ORI is currently trading at a FY25 P/E of 16.4-times.
Summary
Cooper Investors
31 Mar 2024
$18.34
- Orica (ORI) undertook a $465mn equity capital raising to fund the acquisition of Cynanco.
- Cynanco is a North American supplier of sodium cyanide to the gold mining industry, enhancing Orica’s mining chemicals footprint.
- This acquisition aligns with management’s stated strategy and is expected to deliver reasonable returns over the medium term.
- It is the third major acquisition since Sanjeev Gandhi became CEO in 2021, part of a total $1.8bn investment.
- The number of shares has increased 17.8% since the end of 2021.
- Cooper Investors supports the management’s capital deployment as strategically aligned to generate attractive returns.
- Concerns remain regarding excellent management execution, especially with the pricing of Axis and Terra Insights.
- Preference is for growth to be supported by organic cash flow, minimizing dilutionary equity raises.
- Looking for evidence of value creation and cash flow generation from acquisitions before considering further large-scale M&A.
- Management updated the market on 2024 performance, indicating supportive operational trends.
- Maintenance turnarounds at major manufacturing facilities are progressing smoothly.
- Cooper Investors sees attractive risk-adjusted value in Orica as management improves core business performance.
- Focus on long-term value creation through technology and digital solutions in the mining industry.
Summary
Cooper Investors
31 Mar 2023
$15.39
- Cooper Investors continues to hold due to increased confidence in margin recovery opportunities at Orica (ORI).
- The recovery is driven by improved commercial discipline and industry supply constraints.
- Potential for incremental growth through increased market penetration of electronic and wireless detonators over the medium-to-longer term.
- Improved commercial discipline linked to product manufacturing and commercial outcomes through implementation of SAP enterprise management system.
- Encouraging signs support a nearer-term reversionary opportunity and longer-term value creation potential.
- Industry operating trends remain supportive, though vigilance is required regarding potential price-based competitive pressures.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"Confidence seems to be building in Orica's margin recovery and growth potential, fueled by improved discipline and market dynamics. As electronic detonators gain traction, the long-term value creation appears promising, despite the lurking shadow of competitive pressures."
Last Updated: 30 Jun 2025
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Frequently Asked Questions
Who is investing in Orica Ltd (ASX:ORI)?
Fund managers including Cooper Investors, Wilson Asset Management, Equity Trustees Asset Management and Yarra Capital Management have invested in Orica Ltd (ASX:ORI).
Why do fund managers invest in Orica Ltd?
Fund managers invest in Orica Ltd due to its promising margin recovery driven by improved commercial discipline and industry supply constraints. Insights from recent visits to manufacturing operations in Peru and Canada have boosted confidence in the company's growth potential, particularly with the increasing adoption of electronic and wireless detonators. The successful implementation of the SAP enterprise management system further aligns production with commercial goals, supporting both short-term recovery and long-term value creation. Overall, favorable industry trends reinforce the investment thesis.
What happened to Orica Ltd (ASX:ORI)?
There have been no recent updates from fund managers regarding Orica Ltd although fund managers including Cooper Investors, Wilson Asset Management, Equity Trustees Asset Management and Yarra Capital Management have previously commented.