ORBIT CORPORATION

This real estate developer is focused on the premium Mumbal market, which is showing renewed sign of life. Orbit managed to sell a recent premium project on Nepean Sea Road at over Rs 45,000 per square foot. It also had pre-sales in the range of Rs 327 crore for Q4FY1O. This means there’s another Rs 700 crore waiting in the order-book since purchase terms are back-ended.
Orbit has 1.2 million square foot due for delivery in the next year. The real revenue growth is therefore likely to come in FY12. Most analysts do net asset value (NAV) based calculations for real estate developers. Based on the likely 2012 NAV, price targets of Rs 430-460 (roughly l.5x NAV) have been calculated by various analysts. That’s a 50 per cent capital appreciation from current levels. Risks include the usual real estate problems of rising debtors and potentially softening prices.

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