Hi Nirmit. I booked my profits in the stock recently on seeing the results. Had entered in March end. The stock is cheap and will continue to be for the following reasons:
- Cancellation and inability to fulfil orders, few BSE circulars in last 3 months will give you an idea. I have a big doubt on their execution capabilities. A big order book is of no use if it can’t be executed on a timely basis.
- Promoter and promoter group companies continue to support ORIL by way
of interest free unsecured loans of Rs.82.14 crore with Rs.50 crore of it being subordinated. If you factor in the interest cost for these loans, the profitability worsens further. Need to see if and when these loans get converted to equity at some point. - Shareholding is dicey, lot of associates of the promoter are a part of the public shareholding, selling pressure can be created here if there’s any disputes. It’s a tightly held stock retail float wise.
- While the theme is strong, I am not convinced on their operative ability, YoY doubling of topline with net losses is pointless. Need further understanding when this negative operating leverage can turnaround, would need management interaction for this.
| Subscribe To Our Free Newsletter |
