ORG Infomatics Ltd - 100.00 Rs

Incorporated in 1976 & promoted by Amabalal Sarabhai group ORG Informatics Ltd (ORG), was among the several small sized IT hardware and software service companies that were struggling to survive in the post dotcom era and was saddled with accumulated losses. But its fortunes changed dramatically in 2003, with the acquisition of the management control by Global Asia Partners (GAP) led by Ajoy Khanderia. Today, ORG is the niche player in converged IT and telecom space with expertise in various telecom technology domains such as CDMA, GSM, IPTV, DTH, Wi-Max & IP based solution. Company has broadly segmented its business model into three divisions namely system integration, managed services and software solution. Under first two divisions, it provides complete integrated solution in the field of billing & operation support system, NGN/VOIP, SatComm, Wimax, CDMA, IPTV, CRM, Vehicle Tracking system etc. Under third division it offers tailor made as well as pre-packaged applications based on multiples channels like web, phone, mobile etc.

ORG is the pioneer in providing remote sensing turnkey VSAT solutions for enterprise and corporates including banks, financial institutes, manufacturing units, educational institutes etc Initially it started VSAT support with 95 sites which has now spread to more than 5000 VSAT sites across the country. Its solutions include complete supply, installations and maintenance of VSAT equipments, alongwith satellite bandwidth solution. It is also one of the few in the world to deploy GSM networks on VSAT. ORG is registered member at the international Wi-max forum. Its client base includes Airtel, Hutch, Spice Telecom, MTNL and BSNL. Globally, it has presence in 21 countries with clients like Roshan Telecom (Afghanistan), Telebartha (Bangladesh), Mobiletel (Srilanka), Spice Nepal, Saudi Telecom, Maxis (Malayasia), Reuters, Citibank and Mobifusion. Offlate, company has expanded its operations to Tanzania, Nigeria and is also considering DTH (Direct To Home) business in Europe. Few months ago, it has successfully completed the pilot phase of MTNL IPTV commercial rollout and the supply phase of 425 cr MTNL convergent billing project.

Importantly, ORG has a wholly owned subsidiary called ORG Telecom which is also growing at a scorching pace. Earlier in December 2006, ORG raised around 45 cr through a GDR route @ Rs 155 per share to acquire 100% stake in two companies namely - DGIT Solutions (Singapore) and Unified Technologies (Bangalore). Besides, ORG DTH, ORG Singapore, ORG FZE (UAE) & ORG Inc (USA) are few of its other subsidiaries. In early 2007, company also acquired 18% equity stake in Six Dee Telecom Solutions. Meanwhile, last month ORG got a good breakthrough as it signed an agreement to acquire the satellite based business of Belgacom Group, Belgium which is the country national operator. Post acquisition, ORG will be able to provide various satellite-based services including broadcasting across Europe, the Middle East and Africa. To fund this, company intends to raise around 120 cr thru FCCB or private placement route in near future.

Financially company is doing exceptionally well as its topline as well as bottomline, both increased by 100% to 307 cr and 17 cr respectively on a consolidated basis for FY07. Hence it reported a consolidated EPS of 10 Rs on equity of 17 cr. For the first quarter also ORG reported encouraging nos with an OPM of more than 9.50%. Accordingly it may end FY08 with total revenue of 375 cr and PAT of 20 cr excluding the recent takeover of Belgium business. This translates into EPS of 12 Rs on current equity of 17 cr. However, going forward its equity is expected to get diluted by 50% to the extent of 25 cr but at the same time Belgium business will give a fillip to its topline as well as bottomline. Despite being in such a high growth sector and having strong fundamentals, the scrip is trading at its 52 week low. Investors are strongly recommended to buy at current levels as share price can easily appreciate 50% in a year’s time.