Route Mobile’s share price dropped by 5% following a 9% decrease in Q4 profits, while revenue maintained stability. However, FY24 net profit saw a 17% increase. Q4 performance aligned with expectations, although the ILD business faced challenges. Brokerage recommends a ‘BUY’ stance with a target price of ₹2,020.
During Tuesday’s session, Route Mobile’s share price plunged by approximately 5%, triggered by a 9% decrease in Q4 profits to ₹95 crore. This marks a contrast to the same period last year when the company reported a net profit of ₹104.05 crore, as per a BSE filing. Today, Route Mobile’s share price commenced trading at ₹1,486.55 each on the BSE. Throughout the trading day, the stock fluctuated between an intraday low of ₹1,460.55 and an intraday high of ₹1,500.40.
As per Ruchit Jain from 5paisa, the stock has been consolidating within a range for the past few months, but it has recently broken below the lower end of this range. Consequently, there might be some underperformance expected in the short term. The next support level for the stock is estimated to be around the ₹1,400 threshold.
Company Performance and Financial Highlights:
Comparing the revenue from operations in the March 2023 quarter to the preceding one, which stood at ₹1,017.03 crore, there was minimal variation.
Following an increase to ₹333.11 crore in FY23, net profit rose by approximately 17% to ₹388.84 crore in FY24. On an annual basis, revenue grew from ₹3,569.23 crore to ₹4,023.29 crore.
Route Mobile experienced its highest quarterly sales during the second and third quarters, with strong growth observed in the first half, as stated by Group CEO and Managing Director Rajdip Gupta. The company continues to acquire noteworthy clients and offer innovative solutions across various sectors.
Route Mobile’s Q4FY24 Performance and Brokerage Recommendations:
Route Mobile’s Q4FY24 performance was consistent with the evaluation made by Brokerage Nuvama Institutional Equities. The subdued growth witnessed is attributed to the migration of ILD volumes to OTT platforms. Surpassing their anticipated 12.1%, the company achieved a 12.5% EBITDA margin. Challenges in the ILD business arose due to the shift of volume from SMS to OTT platforms in FY24. Nonetheless, the company is expected to benefit from the volume derived from the Vodafone Idea agreement and revenue synergies with Telesign.
“We are not factoring in contributions from synergy due to uncertain timelines. We are revising upwards the earnings estimates for FY25E and FY26E by 10.2% and 11.3%, respectively, owing to stronger growth. Our recommendation remains ‘BUY’ with a target price of ₹2,020 (previously ₹1,930), based on valuing the stock at 25 times FY26E EPS,” stated the brokerage.
Disclaimer: The opinions and suggestions expressed above belong to individual analysts, experts, and broking firms, and do not represent those of SMT. We recommend investors consult certified experts before making any investment choices.
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