Shares of this textile company jumped around 2 percent after announcing the buyback of equity shares with the quarterly results. The shares have delivered more than 30 percent to its shareholders in one year.
With a market capitalisation of Rs. 528 crores, the shares of Orbit Exports Ltd started Friday’s trading session on a higher note at Rs. 200, gaining around 2 percent compared to its previous close of Rs. 192.95. The shares are currently trading at Rs. 197 apiece.
Such a bullish movement in the share price was observed after the company announced the buyback of equity shares along with the quarterly results.
The Board of Directors of Orbit Exports have approved the proposal for the buyback of 6 lakhs of fully paid-up equity shares of the company on a proportionate basis, through the tender offer route, using the mechanism for the acquisition of shares through stock exchanges of the face value of Rs. 10 each from all shareholders of equity shares.
The buyback is made at Rs. 250 per equity share i.e., a premium of 26 percent compared to the current price. Moreover, the transaction involves cash payment for an aggregate amount not exceeding Rs. 15 crores.
Furthermore, the Board of Directors of the company considered and fixed Tuesday, February 13, 2024, as the record date to determine the entitlement and the names of equity shareholders who shall be eligible to participate in the Buyback.
With this, the company announced their October to December results. Looking at the consolidated financial statements, the revenue decreased by 15 percent from Rs. 52.64 crores during the September quarter to Rs. 44.74 crores in the December quarter. In addition, the net profits declined by 48 percent from Rs. 10.29 crores to Rs. 5.39 crores during the same timeframe.
Comparing these metrics on a YoY basis, the revenue decreased by 8 percent from Rs. 48.60 crores during Q3FY23 to Rs. 44.74 crores in Q3FY24. On the other hand, the net profits showcased a downward movement of 23 percent from Rs. 7 crores to Rs. 5.39 crores during the same period.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 8.69 percent during FY 21-22 to 15.16 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 10.52 percent to 17.99 percent during the same timeframe. Furthermore, the net profit margin increased from 12.90 percent during FY21-22 to 16.11 percent during FY22-23.
Headquartered in Mumbai, Orbit Exports was incorporated in 1983. The company is engaged in manufacturing and exporting fancy fabrics, and operates across multiple verticals in the value-added fabric market, from women’s apparel to Christmas crafts and home decor, with special interests in occasion-specific fabrics and finished products.
Written By Vaibhav Patil
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