Omaxe Ltd, BUY

Omaxe Ltd, BUY

CMP: Rs 306 Target Price: Rs 676

Q3FY2008 Result Update

Omaxe Ltd reported net profit of Rs 1.5bn for Q3FY2008. Topline of the company was at Rs 6.7bn for the quarter under consideration. EBIDTA margin stood at 31.2%, while net margin was decent at 23%.

*The company sold ~ 4mn sqf of area in the current quarter across the business line. During the quarter four projects which include 2 in Bahadurgarh and one project each in Patiala and Baddi were launched.

*Omaxe bagged ‘The Empire’ project, a 25 acre development at Kokapet, Hyderabad, from Hyderabad Urban Development Authority (HUDA) with a project value of Rs 20bn. Another mega deal in Vizag having an approximate project cost of Rs 10bn was acquired, thus, introducing itself in Southern India.

*Bidding for Rs 2bn project for Udaipur Airport and Rs 4bn ‘Badarpur Highway’ project with GVK, confirms the company’s seriousness to expand in the infrastructure segment as well

*Also, the company has invested Rs 1400mn in M/s Satvik Hitech Builders Pvt Ltd and Rs 322mn in M/s S.N. Realtors Pvt Ltd. Thus, the company continues to grow the inorganic way also.

*At CMP of Rs 306, the stock trades at a P/E of 6.4x FY2009E and 4.1x FY2010E and EV/EBIDTA of 5.5x FY2009E and 3.6x FY2010E.

We continue to maintain “BUY” on the stock with a revised price target of Rs 676.

FINQST