Highlights

  • Macquarie Research has issued an outperform rating on Orica with a target price of AUD 25.95.
  • Bell Potter Securities (institutional) has issued a buy rating with a target price of AUD 26.00.
  • The ratings might follow Orica’s latest full-year financial and operational update.

Orica Limited (ASX:ORI) has come into analyst focus after receiving positive ratings from two brokerage houses. Macquarie Research has issued an outperform rating on the explosives and mining services group, setting a target price of AUD 25.95. Separately, Bell Potter Securities, through its institutional research arm, has issued a buy rating on the stock with a target price of AUD 26.00.

Overview of Orica’s Operations

Orica operates across Blasting Solutions, Digital Solutions, and Specialty Mining Chemicals, providing products and services to mining, quarrying, and infrastructure customers worldwide. The company’s offerings include explosives, advanced blasting technologies, digital tools, and chemical solutions used across a range of commodities.

Its diversified operating model spans multiple geographies, with exposure to both developed and emerging mining markets.

Full-Year 2025 Financial Performance

For the 2025 financial year, the company reported Net Profit After Tax before significant items of AUD 541 million, representing a 32% increase from the prior corresponding period. Statutory NPAT stood at AUD 162 million, including AUD 379 million of significant items after tax, as previously disclosed.

Earnings before interest and tax reached AUD 992 million, marking a 23% increase year-on-year and the company’s highest EBIT level in 13 years. Earnings per share before significant items rose to 111.8 cents, an increase of 29% from the previous year.

Net operating cash flow amounted to AUD 949 million, up 18% from the prior period, while leverage, excluding leases, was reported at 1.39x. Return on Net Assets was recorded at 13.8% for the year.

Capital Management and Dividend Update

Orica confirmed that its on-market share buy-back program of up to AUD 400 million, announced in March, is substantially complete and has been expanded by an additional AUD 100 million, taking the total program to up to AUD 500 million.

The Board declared an unfranked final dividend of 32.0 cents per share, bringing the full-year dividend to 57.0 cents per share. The final dividend is payable on 22 December 2025 to shareholders on the register as at 24 November 2025. The payout represents a full-year payout ratio of 50%.

Outlook and Forward Guidance

For 2026, Orica expects EBIT growth across all operating segments. Depreciation and amortisation are forecast to be between AUD 520 million and AUD 540 million, with net finance costs and the effective tax rate expected to remain broadly in line with 2025.

Capital expenditure is projected to be consistent with the prior year, while the expanded share buy-back is expected to be completed by March 2026.