Positional Trade

#8
FYI....
sharekhan has recommended Org infor on 15th Sept Investor Eye edition

Sharekhan
www.sharekhan.com
Investor's Eye

[September 15, 2006] Please see the attachment for details

Summary of Contents
STOCK UPDATE

ORG Informatics
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs190
Current market price: Rs89
Significant scale-up in operations: ORG Informatics’ consolidated revenues have grown at a compounded annual growth rate (CAGR) of 75.7% over the past three years. The management expects the mega orders bagged in the last fiscal and a healthy order pipeline to further boost its growth momentum in the current fiscal.
Improving profitability: The robust growth in revenue has been accompanied by consistent improvement in the operating profit margin (OPM) due to the reoriented business strategy to focus on the high-value solution and service business.
Better operational metrics: It generated free cash flow of Rs12.2 crore in FY2006. The return ratios have also improved dramatically with the return on average capital employed (RoACE) and return on average net worth (RoANW) at 37.5% and 43.2% respectively. The debt/equity ratio stood at comfortable level of 0.46 times.
Reduction in promoter holding is a concern: On the flip side, the promoter holding has declined by 10 lakh shares to 74.6 lakh equity shares (63.8% stake holding).
Re-iterate Buy recommendation: At the current market price the stock trades at 7.6x FY2007 and 5.6x FY2008 estimated earnings. We maintain our Buy recommendation on the stock with a revised price target of Rs190 (12x FY2008E earnings per share, including the convertible warrants in the equity base).
Price target revised to Rs190
 

Similar threads