Hi Dinesh,
Yes I continue to hold and recent performance has been very impressive. If they are able to maintain the recent performance, the stock has a lot of potential.
Ayush
Hi Ayush,
Very thanks for the reply.
I could not come back to you early.
How do you see this company 2-3 years down the line.
Regards,
Dinesh
I feel its a interesting co and have been invested from much lower levels. The co may do good work over coming years.
Ayush,
What kind of revenue growth rate do you think this company can deliver?
I’m not putting any no as the co is small and insights are limited. I would be happy if they are able to maintain the past growth of 20-25%
** However,
Thanks Jatin,
True! Promoter take some part of undervaluation.
I would prefer promoters capitalising on the reserve instead of issuing preference issue.
Regards,
**
Hi Ayush,
Very thanks for the reply.
I could not come back to you early.
How do you see this company 2-3 years down the line.
Regards,
Dinesh
Thanks always,
you are good at picking up good companies quite early.
orbit exports acquired 49% in rainbow trading (UAE) in2013.
Does anyone know about rainbow trading company…I search but I could not find anything on the company.
thanx,
vaibhav
Decent Results For Quarter
Sales - 35.3 Cr vs 34.3 Cr Fy13
Net Profit - 2.8Cr vs 4.2 Cr Fy13
Net profit is low because of high tax paid during quarter
Full year result
Sales 132Cr vs 117Cr
Eps 14.91 vs 11.14
I was going through an old interview of Deputy MD
There she mentioned about USP
What is your USP?
Our USP is our presence across the globe. We are supplier of specialty fabrics to global design houses. We have vendor presence in 27 countries across the globe with a showroom in Bangkok. We offer a varied product base catering to the high end niche sector.
On competition from China she mentions,
How do you perceive china vis–vis India?
We see huge growth opportunity for the textile industry as India is a booming economy. China is facing some problems related to labour unrest, energy and environment. Also, prior to the recession in the US, the style of buying was very different and it was in bulk, low cost products. In those aspects China was more competitive than India. If one wants 100,000 metres of one style and one pattern then China is very competitive and can give at a price which India cannot afford.
Now, post recession there is a change in the demand pattern. There is more demand for different style of fabrics rather than bulk products.
Customers would rather buy 10 different styles of fabrics. They will then see what is the response and then place repeat orders. So, the trend has reversed in favour of variety rather than volumes. Here India has an edge over China.
Right now we are supplying in small quantity with a decent price. This is one prime reason for the shift in business to India from China.
2 Likes
Safir Anand recently posted on his blog that he has exited ‘ORBIT Exports’. No reasons were mentioned.
Charlie once said aFrequently, youall look at a business having fabulous results. And the question is, aHow long can this continue?a Well, thereas only one way I know to answer that. And thatas to think about why the results are occurring now a and then to figure out what could cause those results to stop occurring.
In case of Orbit exports, I vaguely understand the reason for good performance for last four yeas [US imposed 210% anti-dumping duty on Chinese imports, backward integration into fabric manufacturing and capacity expansion. Until FY12, OEL was buying semi finished fabric (65% of total output) & selling it after dyeing, printing, etc. Now the share of semi finished fabric has fallen to ~30-35% (for low value items) & the rest is made inhouse (for high value items). But I am not able to figure out factors which will enable sustainable performance for next 2-3 years.
My impression is they are in very niche segment. [MADE UPS - Decorative products used for Christmas, ribbons etc, sells its fabric to Branded Garment manufacturers like Zara & CKand also to mass retailers stores] Looks more like Ador fontech sort of story. Big fish in a small pond…
According to their annual report, their exports accounts for more than 60-70% of India’s exports in that category.I am not very sure of profitable growth even for next 3-4 years. Each customer accounts for less than 5% of overall sales. Again so much customer diversification shows the product being supplied by these guys are not very core product for customers. FY 15 they may pose good growth because of recent capacity expansion, but what about after that.Company claim that their competitors are Italy manufacturers, which I think is their perception than reality. In reality Orbit competitors remain Chinese players…So for now I have more a neutral view on this.
You can download interesting extract of annual report since 2005 from here https://drive.google.com/file/d/0B8Mr8IuAEwz7Y2ZPanVfd0hHSVU/edit?usp=sharing
Some interviews: [already shared in the thread, but sharing again for newbies]
4 Likes
Hi Anil,
Its not easy to get good understanding of Orbit as the company doesn’t has a deep history. The promoters have been doing something new every few years and trying to scale up and move up the value chain. So until n unless they reach a critical size, its tough to get all the understanding. But its appreciable what they have been able to do till now.
If they are able to break into bigger volumes with some of the big names they mention as their clients…it could become a good story.
Regards,
Ayush
Disc: I hold
category.I that.Company
1 Like
Sales traction seen. Even at Operating levels it looks quite nice.
I have been recently checking their products and it looks that they have a good combination design skills and ability to supply to their customers on time. The people look genuine and there wont be any dilution further.
Disc: Invested from last 3 months or so and am positively biased now.
The company have been continuously diluting equity over years. Its almost doubled in 4 years. Does anyone see this as concerning?
Hi @sunilsurana, the company issued bonus shares in ratio of 1:2 in July 2012 which is the main reason for increase in company’s equity base. The company has also issued fully convertible warrants to the promoters, but the % dilution due to these warrants is very small (3-5%).
AR 2014-15 says “During the year 2014-15 the Company has converted 450000 Optionally Fully Convertible Warrants (OFCWs) into 450000 Equity shares of Rs.10/- each at an issue price of Rs.76.57/- per Share (including Premium @Rs.66.57/- per Share) in the Board Meeting held on 18th June, 2014 to Mr. Pankaj Seth (2,25,000 Equity Shares of Rs.10/- each) and Mrs. Anisha Seth (2,25,000 Equity Shares of Rs.10/- each) and the aggregate proceeds amounting to Rs.2,58,42,375/- in aggregate received balance 75% during the year through allotment and conversion of Warrants has been utilized for the object for which such issue was made” Is it normal practice to give warrants at such heavy discount? Are there any more warrants pending? At what point should we raise a red flag?
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Hi @sajijohn ,
Warrants issued once in while is fine to raise capital.
But each year issuing warrants does seem concerning which Pankaj Seth is is being issued frequently. The promoters have been increasing their stake thru warrant and not buying from open market.
Exited due to same reason.
Please see below image, the no of shares for 2010 to 2012 have been adjust for bonus issues in 2:1 ratio. Every year equity have been diluted by 5-8% consistently and that too issuing warrants.
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What was the findings during the visit to the plant… Can somebody throw the light on the same?