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Tuesday, November 20, 2007

Multi bagger recommendation - Buy Orbit Corporation Ltd

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Multi Bagger: Orbit Corporation Ltd.
Recommended Price Rs 704.70
India Infoline,Investment Advisor Report Dated: Nov 19, 2007
Orbit Corporation Ltd (OCL), incorporated in the year 2000, is a construction and real estate developer, primarily focusing on redevelopment of existing properties. The company specializes in developing, designing and managing high-end residential and commercial properties. The business model of OCL is to acquire land or dilapidated buildings in Mumbai and convert them into premium commercial properties or residential complexes.

Holdings No. of Shares
As on 30th Sept 2007 (%) (in Lacs)
Promoter 60.5 219.4
Non-promoter 12.2 44.5
FII & MF 9.1 33.1
Other 18.2 66.4
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OCL has 16 re-development projects in Mumbai with approximately 1.1mn sq.ft of developable area. According to estimates, there are 16,000 old and depleted buildings in Mumbai, giving huge market opportunities to the company. On account of low acquisition cost is low in redevelopment projects; the company enjoys healthy margins as it mainly operates in redevelopment under development control regulation schemes.

(Rs cr) FY05 FY06 FY07
Revenues 19 1 192
Operating profit 4 4 76
OPM (%) 23.3 526.4 39.6
PAT 4 0.1 57.3
Equity 11 21.6 27.1
EPS (Rs) 3.7 0.1 21.1


The company is redeveloping its Kalina property to be completed and handed to the Jindal group by March 2009 for Rs 807 cr. This is one of its massive projects and land for the same was acquired from Ambuja Cements for Rs 330 cr only. The company is all set to witness huge gains from this deal as the development cost is estimated to be around Rs 150 cr, which would reap in huge profits.

Quarterly performance on a consolidated basis has been encouraging too. The company registered a topline growth of 53% QoQ to Rs 97.5 cr in Q2FY08. Net profit during the same period zoomed by 117% QoQ. We recommend investors to BUY this stock with a long term view.
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Disclaimer:
This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer or solicitation for the purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your responsibility alone and India Infoline Ltd (hereinafter referred as IIL) and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not represent that it is accurate or complete. IIL or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to a ny person from any inadvertent error in the information contained in this publication. The recipients of this report should rely on their own investigations. IIL and/or its subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.    
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