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The stock of Orbit Corporation slid 76 per cent over the last three years, with the declines more pronounced in the last one year. Interestingly, Orbit showed strength in financial performance in 2008 and continued the robust show until June 2009, on the back of strong execution in projects. However, for four quarters now, starting September 2010, both sales and earnings have been on a declining trend.
This Mumbai-based real estate player has been seeing slower execution of projects and poor volume off-take. New launches too have seen a sharp slowdown what with delays in approvals.
For the quarter ending June, consolidated sales declined 29 per cent over a year ago to Rs 85 crore, while net profits fell sharply by 55 per cent to Rs 9 crore.
Volumes sold in the June quarter dipped to 9,985 sq.ft. from 11,249 sq.ft. seen in March. This is also an indication that new launches have been slow. As a result of slower execution, cash flows have suffered.
Net debt-equity ratio at 0.8 times may not decline unless cash flows improve. The promised pipeline of launches in Lalbaugh, Santacruz and Napeansea Road in FY-12 may hold the key for improving cash flows.
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