(BSE CODE:532880)
| CMP | 6 Months Target | Recommendation |
| Rs 547 | Rs 685 | Buy |
| Omaxe Ltd (OL) was founded as a civil construction and contracting organization in1989 and subsequently diversified its business to focus on Real Estate Development from the year 2001. The company has involved in residential and commercial real estate development projects ranging from integrated townships, group housing and retail and other commercial properties, hotels, information technology and bio-tech parks to special economic zones. The company operations span across all aspects of real estate development, from the identification and acquisition of land, to the planning, execution and marketing projects. | |
| The company in a short span of 5 years has completed and delivered 10 projects consisting of 8 residential and 2 commercial covering approx 5.13 million sq. ft of area, with all 'on time deliveries'. The company currently has 52 projects under development. Of these 52 projects, 38 are under development and 14 in various stages of approvals for development. The company expects to commence development of these 14 projects in the current year ending March 2008 (FY 2008). The 16 integrated townships are essentially 'mixed-use' areas consisting of residential and commercial projects and are expected to include 10 group-housing projects, 16 commercial developments, one biotech park and one information technology park. It is also developing projects in the hospitality sector. Its hotels at Amritsar, Greater Noida and Patiala are part of commercial malls under construction. OL has applied for change of land use for its hotel project in Faridabad. | |
| Most of OL's residential developable space is in non-NCR locations of northern India. Just 19% of the space from the current group-housing projects that can be developed is either under development or in various stages of approval in the national capital region (NCR). All the township projects are in Tier II and III cities/ towns in north India. However, the share of NCR region in the total commercial space that can be developed is 49%. | |
There are huge opportunities available in the emerging real estate market in India. Government has been pragmatic and supportive in its approach in ushering in reforms in the industry which should open up more avenues of growth. According to various studies, continuing housing boom should sustain along with growing demand for retail and commercial space in the coming years. Apart from normal business risks, Company is facing competition from its old competitors as well as new entrants in the same line of business. However, it is a well established player and has a professional management team coupled with infusion of high-tech approach, Omaxe has created a niche for itself in the market. | |
Indian economy is on robust growth track. For the past three year, average GDP growth was over 8% and 'Sensex' has consistently been beating its own all time high. India has been one of the hottest destination for foreign investment. There has been a tremendous demand for quality Real Estate. Developments in the retail, hospitality and entertainment( e.g., hotels, resorts, cinema theatres) industries, community services (e.g., hospitals, schools) and IT and ITES (e.g., call centres) etc. and vice versa as well as owing to the fact that quality real estate development prompts raising of standards of retail, hospitality etc. has triggered this ever increasing demand. | |
| Access to land reserve of approximately 3,255 acres. Total land reserve includes about 571 acres belonging to joint ventures and collaborations in which OL has an economic interest of approximately 74% calculated on a weighted average basis. It owns 31% of the land reserve directly or through its subsidiaries and has sole development rights on 46% of the land bank. About 6% of the land has been allotted by the government and its agencies on a long-term lease of about 90/99 years. Of the total land reserves, around 3096 acres (including approximately 451 acres belonging to joint ventures and collaborations) relate to projects that are currently under development or in various stages of approval for development, representing approximately 150 million sq. ft. of saleable area. Of the 150-million sq ft saleable area, about 66.6 million sq ft will be for group housing and 77.3 million sq ft developed into township and 4.89 million sq ft reserved for commercial purpose. | |
| One of the first developers to conceptualise and develop theme malls in north India. OL conceptualised wedding mall: the one-stop shop for wedding arrangements. Given the strong supply glut in the retail space in the NCR region, this ability to differentiate its property will hold good in attracting tenants and retaining them. | |
| Omaxe reported a net profit of Rs 116.73 crore on sales of Rs 446.91 crore in Q2 September 2007. | |
| Omaxe has announced that tender offer of the company to the tender floated by Delhi Metro Rail Corporation (DMRC) for commercial development of chawri bazar metro station, has been accepted by DMRC. The tender offer comprises of the company's quoted amount of Rs 25,51,001 per quarter for 1529 sq mtr for the work of commercial development of chawri bazar metro station. The license period is for 12 years from the date of handover of the site by DMRC. The total contract amount for 12 years is Rs 18,43,25, 280.40 considering 20% increase on compounding basis after competition of every three years. | |
| Omaxe entered into a memorandum of understanding (MoU) with the state government of Rajasthan for setting up a multi product special economic zone at Alwar district in the state. Omaxe has already bid for the 30-crore Ganga expressway project in Uttar Pradesh, which extends from Noida to Balia, in addition to the bids for modernisation of Amritsar and Udaipur airports. | |
| The company has requently acquired land measuring 11 acres at Faridabad, Haryana for Rs 45 crore. It has also bought 19.53 acres of land in Visakhapatnam for Rs 157 crore. | |
| Omaxe is one of the fastest growing real estate company in India through its wholly owned subsidiary M/s Eden Buildcon Private Limited today bagged 'The Empire' project, a 25 acre premium plot situated at Kokapet area in Hyderabad, from Hyderabad Urban Development Authority (HUDA). The Empire project is for multipurpose use and Omaxe will develop commercial / shopping mall, office complex, and star hotels on this land with an approx project value of Rs 2000 crores. The bid was invited in an 'auction of premium plots for multipurpose use' by HUDA. | |
Omaxe Ltd. has moved through monumental stages from its inception, growth, and expansion to deliver quality Real Estate projects. The Company is expanding into newer horizons with a missionary zeal and a dynamic team.Today, Omaxe has managed to be one of the major players in the Real Estate industry of India. The core of this success lies in our winning corporate culture; that promotes growth with innovation; besides a customer focused strategy that is guided by quality, creative solutions, timely delivery and a never ending search for innovative ways to provide satisfaction to our valued customers. Thus, we recommend investors to BUY the stock for investment |
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