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Amidst global economic slowdowns, India emerges as a beacon of growth, showcasing resilience and vigour in its economic trajectory. With a robust recovery from the COVID-19 pandemic, India’s GDP surged by 7.2% in fiscal 2023, outpacing both advanced and emerging economies. Projections by CRISIL indicate a further expansion of 6.4% in fiscal 2025, buoyed by the manufacturing sector’s resurgence, robust investments, and resilient domestic demand
The Union Budget 2023-24 underscored the government’s commitment to bolstering the country’s technological infrastructure, with a substantial allocation of Rs 16,549 crore to the IT ministry, marking a 40% increase from the previous year.
The demand for technology-driven financial services continues to soar, according to the information disclosed in DRHP by Orient Technologies Ltd. The company stands poised to capitalise on this trend, driving growth through innovation and seamless digital solutions tailored to India’s dynamic landscape.
Elara Capital (India) Private Limited is the book running lead manager for the issuance of equity shares by Orient Technologies Limited, each with a face value of Rs 10. The company aims to raise up to Rs 120 crore through this IPO. The company’s promoters are Ajay Baliram Sawant, Jayesh Manharlal Shah, Umesh Navnitlal Shah, and Ujwal Arvind Mhatre. The net proceeds from the issuance, totalling Rs 120 crore, will be allocated towards fulfilling the company’s capital expenditure requirements, amounting to Rs 79.65 crore. Additionally, a portion of the proceeds, Rs 10.35 crore, will be utilized for acquiring office premises in Navi Mumbai. This strategic allocation of funds reflects the company’s intention to strengthen its operational capabilities and expand its physical infrastructure, thus supporting future growth and development endeavours.
Orient Technologies, a dynamic IT solutions provider founded in 1997 and headquartered in Mumbai, Maharashtra, has swiftly emerged as a key player in India’s burgeoning IT landscape. Specializing in tailor-made solutions, Orient Technologies boasts a diverse portfolio across three core business verticals: IT Infrastructure, IT Enabled Services (IteS), and Cloud and Data Management Services. Collaborating with esteemed technology partners such as Dell, Fortinet, and Nutanix, the company prides itself on its ability to customize offerings to meet the unique needs of its clientele.
Driven by a customer-centric approach, Orient Technologies has garnered a prestigious clientele spanning various industries, including banking, financial services, insurance (BFSI), IT, ITeS, and healthcare/pharmaceuticals. With a steadfast commitment to nurturing long-term client relationships, the company continually engages with its customers to better understand their requirements and identify new areas for collaboration. This relentless focus on customer satisfaction has positioned Orient Technologies as a trusted partner in the digital transformation journey of numerous public and private sector entities.
Orient Technologies offers an extensive array of products and services tailored to meet the evolving needs of its clientele. In the realm of IT Infrastructure, the company provides cutting-edge solutions encompassing Data Centre Solutions (DCS) and End-User Computing (EUC). From servers and storage to security solutions, Orient Technologies leverages emergent technologies such as Hyper-Converged Infrastructure (HCI) and virtualization to deliver robust IT infrastructure solutions.
Under its IteS portfolio, Orient Technologies offers a comprehensive suite of services including Managed Services, Multi-Vendor Support Services, and IT Facility Management Services. Recent forays into ‘Device as a Service (DaaS)’ model further enhance its offerings, providing hardware and managed services on a subscription basis. With offerings like Infrastructure as a Service (IaaS) and Security as a Service (SECaaS), Orient Technologies remains at the forefront of innovation, empowering organizations to thrive in the digital era.
| Particulars | 6 months ended September 30, 2023 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Revenue from operations | 266.31 | 535.1 | 467.44 | 247.34 |
| Gross Profit | 49.66 | 102.58 | 86.21 | 31.1 |
| Gross Profit Margin (In %) | 18.65% | 19.17% | 18.44% | 12.58% |
| EBITDA | 22.8 | 48.64 | 45.83 | 3.15 |
| EBITDA Margin (In %) | 8.56% | 9.09% | 9.80% | 1.27% |
| Profit before tax (PBT) | 21.77 | 51.95 | 44.55 | 0.48 |
| Profit after tax (PAT) | 16.4 | 38.3 | 33.49 | 0.13 |
| PAT Margin (In %) | 6.16% | 7.16% | 7.17% | 0.05% |
| ROCE (In %) | 13.21% | 31.45% | 45.25% | 0.94% |
| Inventory turnover ratio | 18.3 | 39.77 | 42.27 | 49.49 |
| DSCR (In times) | 3.61 | 4.53 | 26.45 | 0.53 |
| Return on net assets (In %) | 11.30% | 29.73% | 35.59% | 0.22% |
| ROE (In %) | 11.97% | 34.36% | 43.11% | 0.22% |
| Current ratio (In times) | 2.28 | 2.21 | 1.9 | 1.8 |
| Trade receivable turnover ratio | 1.99 | 5 | 6.11 | 3.51 |
| Net capital turnover ratio | 1.99 | 4.54 | 5.6 | 4.97 |
The company’s revenue from operations as given in their DRHP has shown consistent growth over the past three fiscal years, indicating the expansion of Orient’s business operations. In the 6 months ending September 30, 2023, the company’s revenue amounted to Rs 266.31 crore, with the largest portion originating from the IT Infrastructure Products and Services segment (47.70%), followed by ITeS (22.70%) and Cloud and Data Management Services (29.60%).
Orient has diversified its customer base across various industries, with significant contributions from BFSI, Communication, and Others. Additionally, the company’s Order Book as of December 31, 2023, was valued at Rs 92.76 crore, signalling promising future revenue prospects. While Orient’s operations primarily focus on India, the company maintains a presence in key cities and has established a branch in Singapore to facilitate its expanding business.
In comparison to its industry peers as given in its DRHP, Orient Technologies Limited demonstrates strong performance in several key areas. Its revenue from operations stands at Rs 535.1 crore, surpassing Dynacons Systems & Solutions Limited, Allied Digital Services Limited, and Silicon Rentals Solutions Limited.
| Particulars | Orient Technologies Limited | Dynacons Systems & Solutions Limited (Consolidated) | HCL Technologies Limited (Consolidated) | Wipro Limited (Consolidated) | LTIMindtree Limited (Consolidated) | Allied Digital Services Limited (Consolidated) | Dev Information Technology Limited (Consolidated) | Tech Mahindra Limited (Consolidated) | Silicon Rentals Solutions Limited (Standalone) |
| Revenue from operations | 535.1 | 804.47 | 1,01,456.00 | 90,487.60 | 33,183.00 | 66.01 | 124.16 | 5329.02 | 36.3 |
| Gross Profit | 102.58 | 97.38 | 8,450.10 | 7,829.85 | 3,035.44 | 25.74 | 63.45 | 452.9 | 35.37 |
| Gross Profit Margin (In %) | 19.17 | 12.1 | 83.29 | 86.53 | 91.48 | 38.99 | 51.1 | 84.99 | 97.46 |
| EBITDA | 48.64 | 54.62 | 2,26,280.00 | 1,68,479.00 | 61,077.00 | 88.31 | 6.93 | 77,628.00 | 29.98 |
| EBITDA Margin (In %) | 9.09 | 6.79 | 22.3 | 18.62 | 18.41 | 13.38 | 5.58 | 14.57 | 82.61 |
| Profit before tax (PBT) | 51.95 | 44.68 | 1,94,880.00 | 1,47,657.00 | 57,915.00 | 72.97 | 11.26 | 64,455.00 | 14.16 |
| Profit after tax (PAT) | 38.3 | 33.45 | 1,48,450.00 | 1,13,665.00 | 44,103.00 | 53.74 | 9.02 | 48,570.00 | 10.67 |
| PAT Margin (In %) | 7.16 | 4.16 | 14.63 | 12.56 | 13.29 | 8.14 | 7.27 | 9.11 | 29.41 |
| ROCE (In %) | 31.45 | 30.71 | 26.34 | 14.19 | 29.69 | 11.76 | 11.61 | 18.65 | 0.28 |
| Inventory turnover ratio (In times) | 39.77 | 13.15 | 87.17 | 96.66 | 764.49 | 9.97 | 12.57 | 249.62 | NA |
| DSCR (In times) | 4.53 | 8.41 | 4.4 | 0.91 | 3.61 | 12.52 | 8.4 | 15.66 | 21.29 |
| Return on net assets (In %) | 29.73 | 31.93 | 22.7 | 14.62 | 26.57 | 9.41 | 21.68 | 17.11 | 20.95 |
| ROE (In %) | 34.36 | 38.73 | 23.3 | 15.88 | 28.55 | 9.53 | 24.25 | 14.69 | 1.21 |
| Current ratio (In times) | 2.21 | 1.42 | 2.5 | 2.47 | 3.13 | 3.53 | 2.08 | 2.07 | 5.74 |
| Trade receivable turnover ratio (In times) | 5 | 3.38 | 4.23 | 4.91 | 5.16 | 3.68 | 3.76 | 4.21 | 5.37 |
| Net capital turnover ratio (In times) | 4.54 | 6.89 | 3.16 | 2.3 | 2.84 | 2.34 | 5.19 | 4.75 | 3.83 |
Additionally, Orient Technologies boasts a gross profit of Rs 102.58 crore, showcasing healthy profitability alongside HCL Technologies Limited and Wipro Limited. Moreover, with a gross profit margin of 19.17%, Orient Technologies maintains competitive margins comparable to its peers. Furthermore, its return on capital employed (ROCE) of 31.45% outperforms most of its counterparts, indicating efficient utilisation of capital to generate profits.
However, its profit after tax (PAT) margin of 7.16% falls slightly behind the margins achieved by LTIMindtree Limited and HCL Technologies Limited. Overall, Orient Technologies exhibits robust financial performance relative to its industry peers, particularly in revenue generation, profitability, and return on capital.
Orient Technologies Ltd boasts a solid reputation since its inception in 1997, offering tailored products and services to a diverse range of industries. With a focus on quality and customer satisfaction, Orient Technologies collaborates with leading technology partners like Dell and Fortinet to deliver innovative solutions in areas such as HCI, End-User Computing, and Robotic Process Automation. The company serves various sectors, including BFSI, IT, healthcare, and government agencies, demonstrating its ability to cater to a broad customer base. Additionally, Orient Technologies has established strong relationships with key clients such as Coal India and Mazagon Dock, contributing significantly to its revenue. Backed by experienced promoters, a knowledgeable board of directors, and a skilled management team, Orient Technologies is well-positioned for continued success in the competitive technology sector.
According to the data given in their DRHP, The shift towards non-voice CRM and digital payments drives growth in the IT-enabled services (ITeS) sector. In Fiscal 2023, the Indian ITeS industry grew by 10%, with expectations of slower growth at 7-9% in Fiscal 2024. Between Fiscal 2023 and Fiscal 2027, ITeS exports are forecasted to grow at a CAGR of 6-8%.
Notably, the CRM segment’s growth is expected to slow due to competition from the Philippines in the voice space, while transaction services growth may moderate due to automation. However, Indian ITeS players leverage technologies like Generative AI and RPA to navigate risks and drive growth.
As with any company going public, there are several risks associated with investing in Orient Technologies Ltd which are mandatory to be disclosed in DRHP. The are follows:
Conclusion
Orient Technologies Ltd’s financial data reveals a compelling growth story, with consistent revenue growth, healthy profitability margins, and strong returns on capital employed. The company’s strategic focus on IT infrastructure, ITeS, and Cloud and Data Management Services has enabled it to cater to diverse customer needs and establish itself as a trusted partner in the digital transformation journey of its clients.
Despite facing market risks and regulatory challenges, Orient Technologies Ltd’s strong fundamentals, coupled with India’s expanding IT landscape, position it for continued success and growth in the years to come.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
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