Scripscan:Orbit Corporation Ltd
cmp:27
Code:532837
Story:Orbit Corporation Limited, together with its subsidiaries, operates as a real estate development company in India. It primarily focuses on redeveloping projects in the Island City of Mumbai, including developing and designing residential and commercial properties. The company is also developing various projects in the Mumbai metropolitan region comprising projects at Andheri, Bandra-Kurla Complex, and Santacruz, as well as a gated township at Mandwa near Alibaug. It primarily serves high net worth individuals and corporate houses.Orbit Corp's (ORB) net sales for Q2FY12 increase 5.9% YoY to Rs1.0bn, 16% higher than estimate of Rs890mn.EBITDA margins stood at 25.4% and improved by 99bps QoQ. However, PAT fell to Rs42mn, down 54% QoQ and 63% below estimate of Rs112mn.Fall in PAT was mainly on account of higher interest cost of Rs284mn (capitalized & expensed) during the quarter v/s Rs209mn in Q1FY12.Higher interest cost during the quarter was due to higher borrowing costs, increase in debt and restructuring of two loans in its projects. The company plans to launch few big ticket projects in H2FY12 which include Santacruz (Orbit Grandeur) and Lalbaugh.I believe that any delay in launch plans or delay in receipt of money for Orbit WTC/ Orbit Ocean Parque may further increase D/E levels from existing level of 0.85x.The company has mandatory debt repayment of Rs375mn in Q3FY12.Since the stock has corrected significantly to a price of Rs27,I upgrade the stock to BUY purely on valuation front and maintain my target price of Rs 40 after assigning a 40% discount to NAV.Though I dont see any near term triggers for the stock in H2FY12.
cmp:27
Code:532837
Story:Orbit Corporation Limited, together with its subsidiaries, operates as a real estate development company in India. It primarily focuses on redeveloping projects in the Island City of Mumbai, including developing and designing residential and commercial properties. The company is also developing various projects in the Mumbai metropolitan region comprising projects at Andheri, Bandra-Kurla Complex, and Santacruz, as well as a gated township at Mandwa near Alibaug. It primarily serves high net worth individuals and corporate houses.Orbit Corp's (ORB) net sales for Q2FY12 increase 5.9% YoY to Rs1.0bn, 16% higher than estimate of Rs890mn.EBITDA margins stood at 25.4% and improved by 99bps QoQ. However, PAT fell to Rs42mn, down 54% QoQ and 63% below estimate of Rs112mn.Fall in PAT was mainly on account of higher interest cost of Rs284mn (capitalized & expensed) during the quarter v/s Rs209mn in Q1FY12.Higher interest cost during the quarter was due to higher borrowing costs, increase in debt and restructuring of two loans in its projects. The company plans to launch few big ticket projects in H2FY12 which include Santacruz (Orbit Grandeur) and Lalbaugh.I believe that any delay in launch plans or delay in receipt of money for Orbit WTC/ Orbit Ocean Parque may further increase D/E levels from existing level of 0.85x.The company has mandatory debt repayment of Rs375mn in Q3FY12.Since the stock has corrected significantly to a price of Rs27,I upgrade the stock to BUY purely on valuation front and maintain my target price of Rs 40 after assigning a 40% discount to NAV.Though I dont see any near term triggers for the stock in H2FY12.
