Subscribe for Orient Technologies Ltd; Geojit Financial Services

Geojit Financial Services, has come out with its report on Orient Technologies Ltd. The research firm has recommended to “ Subscribe” the ipo in its research report as on August 20 2024.

Broker Research

August 21, 2024 / 10:12 IST

IPO

Geojit Financial Services, IPO report on Orient Technologies Ltd

Orient Technologies Ltd. (OTL), established in 1997, headquartered in Mumbai, is an information technology (IT) solutions provider with expertise in developing products and solutions for specialised disciplines across its business verticals. OTL provides customised offerings to its clients by collaborating with wide range of technology partners including DELL, Fortinet and Nutanix. The business verticals include IT infrastructure comprising data center solutions and end-user computing (contributes to ~52% of topline in FY24); ITenabled (ITeS) services (contributes to ~22% of topline in FY24 ), and cloud and data management services (contributes to ~26% of topline in FY24). OTL serves leading public and private sector entities across diverse end use industries such as BFSI, IT, IteS, healthcare/ pharmaceutical. The global IT industry registered a growth of 5.6% CAGR (CY19-CY23) and is expected to grow at CAGR of 7-9% from CY23-CY27 reaching $ 1,150 – 1,220 bn by CY27. (source: CRISIL). The Indian data centre industry witnessed a growth of ~25%CAGR (FY18-24) and is expected to grow at 30-35% CAGR (FY24-FY27) to Rs.280bn by FY27E led by rise in digital share, 5G rollouts, and advanced technologies like AI, Big data etc. (source: CRISIL). OTL has a order book worth Rs.101cr as of June FY24, of which 30% belongs to Government & PSUs and 20% is from BFSI segment.

Valuation and Outlook

At the upper price band of ₹206, OTL is available at a P/E of 20.7x (FY24), which appears to be attractively priced compared to its peers. Considering its expansion to other related areas including IT facility management, network operations centre (NOC), cybersecurity, data management, Daas services and positive industry tailwinds, we assign a “Subscribe” rating on a short to medium term basis.

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