Orient Technologies - Next IT Multibagger or Hyped story? Orient Technologies Fundamental Analysis

Summary

The video discusses the IPO of Orian Technologies, an IT solutions provider with a market cap of 850 CR during its IPO. Despite its oversubscription, the video advises caution due to the company's commoditized business model and low margins. It highlights the company's three key business segments: IT infrastructure, IT-enabled services, and cloud and data management services. The video emphasizes the importance of understanding a company's business model and valuation before investing, suggesting that Orian's current P/E ratio of 32 is a premium valuation given its growth rate and business nature.

Takeaways

• 🌟 Orian Technologies had an IPO with a market cap of 850 CR and was listed at 302 rupees, a 47% jump from its IPO price of 206 rupees.
• 📈 The company's IPO was heavily oversubscribed, reflecting a strong market response but also indicating a low probability of retail investors getting IPO allocations.
• 🏢 Orian Technologies is categorized as a micro-cap company with a primary focus on IT infrastructure, IT-enabled services, and cloud and data management services.
• 💼 The company operates in a highly competitive market with a significant portion of its business being commoditized, leading to lower margins.
• 🌐 Geographically, Orian Technologies is almost entirely dependent on the Indian market, with 99% of its revenue coming from domestic sources.
• 🔑 The company's future growth potential is tied to its ability to transition from low-margin IT infrastructure services to higher-margin new-age tech solutions like cloud and data management.
• 📊 Despite having a PE of 32 after the listing, the speaker suggests that this might be a premium valuation considering the company's growth rate and business model.
• 🚀 The video emphasizes the importance of understanding a company's business model and valuation before investing, rather than relying solely on market hype.
• ⚖️ Key risks for Orian Technologies include extreme competition, client concentration, high attrition rates, and the risk of technology obsolescence.
• 📚 The speaker, with an IT background, aims to educate viewers on the company's business model and financials to empower them to make informed investment decisions.

Q & A

What was the market cap of Orian Technologies during its IPO?

The market cap of Orian Technologies during its IPO was around 850 CR.

How many times was Orian Technologies' IPO oversubscribed?

Oran Technology's IPO was oversubscribed by 155 times.

What was the listing price of Orian Technologies compared to its IPO price?

Oran Technology was listed at 302 rupees versus the IPO price of 206 rupees, reflecting a 47% jump on the listing day.

What is the primary reason for not discussing Oran Technology before its IPO?

The primary reason for not discussing Oran Technology before its IPO was the anticipation of a crazy response and low probability of IPO allocation, along with the belief that it wouldn't significantly change one's life with just one lot.

What is the current PE ratio of Oran Technology after its listing?

Even after the high gains, Oran Technology commands a PE ratio of 32.

What are the three key verticals of Oran Technology's business model?

The three key verticals of Oran Technology's business model are IT Infrastructure, IT Enabled Services, and Cloud and Data Management Services.

What is the contribution of IT Infrastructure to Oran Technology's revenue?

IT Infrastructure is the largest revenue-generating segment for Oran Technology, contributing 52% to the company's revenue.

What is the growth potential of the data center segment in India according to the script?

The data center segment has immense growth potential in India due to the large amount of data being generated and the need for local data storage and processing.

What are the key risks associated with investing in Oran Technology as per the video script?

The key risks associated with investing in Oran Technology include extreme competition, client concentration risk, attrition risk, high trade receivable, and technology obsolescence risk.

What is the author's opinion on Oran Technology's current valuation after its IPO?

The author believes that Oran Technology's current valuation of 32 PE is already a premium and not comfortable considering the nature of its commoditized business and the 12-15% growth in the last 2 years.

What is the author's advice for investors considering Oran Technology's stock after its IPO?

The author advises investors to understand the business model and valuation thoroughly and to be cautious about investing at higher levels, suggesting that the fair valuation should be in the range of 20-30 PE.