Orbit Corp sees better balance sheet going into FY13

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Orbit Corp sees better balance sheet going into FY13

Pujit Aggarwal, managing director of Orbit Corporation tells CNBC-TV18 that it is indeed a relief that interest rates have peaked. “What we are expecting now is that interest rates will moderate and start coming down going ahead,” he says. This will also boost liquidity in the system that will bide well for the real estate players.

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Pujit Aggarwal, managing director of Orbit Corporation tells CNBC-TV18 that it is indeed a relief that interest rates have peaked. "What we are expecting now is that interest rates will moderate and start coming down going ahead," he says. This will also boost liquidity in the system that will bide well for the real estate players.

"The result would be that projects which are to be completed, would be completed at lower cost," Aggarwal says. "This will in turn benefit the buyers," he says.

Also watch the accompanying video for his comments.

There would be three things that the buyers would get benefited from: Firstly, they will have greater choice because they will have more completed projects; secondly, lower prices of real estate because the developers may offer it at a lower price and thirdly, the home loan rate, which is a critical factor for a buyer, will start coming down. From 8% it has gone up to 13% now. "So I expect the buyers to start looking at real estate once again and come in large numbers once the rate goes down to sub 11%," the Orbit Corp chief says. Remember that the balance sheet of the company had been impacted much over the past year because of rising interest rate cost.

Aggarwal says that Orbit Corporation is looking at three- four projects for bank finance. "Once the liquidity comes in, those three or four projects would start, the financial closure would take place and we would look at offering them in the public for construction," he says. This is likely to materialise in the next quarter.

Adding two and two, Aggarwal sees no major immediate impact of the RBI move on the company's revenues or margins, but over the next fiscal (FY13), there could be a positive impact on balance sheet, he says.