Route Mobile's consolidated net profit jumped 84.40 per cent to Rs 85.36 crore, whereas revenues from operations surged 75 per cent to Rs 985.72 crore in the December 2022 quarter, compared to a year ago period. Sequentially, net profit rose 17.53 per cent while net sales increase 16.54 per cent.
Route Mobile reported a consolidated profit before tax stood at Rs 103.13 crore in Q3 FY23, registering a growth of 87.20 per cent from Rs 55.09 crore in the same period previous fiscal. EBITDA improved 66 per cent to Rs 128.3 crore in Q3 FY23. However, EBITDA margin de-grew to 13 per cent in Q3FY23, which was 13.7 per cent in Q3 FY22.
Route Mobile's shares surged over 10 per cent to Rs 1,257.95, following the announcement of results. However, the stock pared up some gains to trade at 12,51.95 at 10.10 am. The scrip had settled at Rs 1,142.10 in the previous session.
Shares of Route Mobiles have been trading 40 per cent lower from its 52-week high of Rs 1,886.60, hit on February 1, 2022. The stock has tumbled 25 per cent in the last one year, whereas it is down by 7 per cent in the last six months.
The company said that the board of directors in its meeting scheduled on Thursday, 26 January 2023 will consider second interim dividend, if any, for the financial year 2022-23.
Nuvama Institutional Equities said Route Mobile posted stellar results with better-than-expected revenue and profitability. With sustained growth momentum on the back of diversified product portfolio and geographical mix, Route is on track to clock 70 per cent revenue growth for FY23, it said.
Route’s business remains solid – revenue growth, going ahead, will be rooted in LATAM, Middle East and Africa. Cash flows have been constrained owing to strategic business initiatives for a couple of firewall deals and will likely normalize Q1FY24 onwards, Nuvama said.
Route’s overall performance has been impressive, given the backdrop of cautious spending from enterprises amid macro headwinds. Route continues to gain market share and benefit from its global presence, it said with a buy call and a target price of Rs 1,590.
Adjusted for ESOP benefit expenses, non-cash amortization associated with the intangible assets added as a result of purchase price allocation for acquisitions, said Arihant Capital Markets. Messaging bad debt written off pertaining to the pre-acquisition period amounting to Rs 5.84 crore.
"Currently, Route is trading at a PE of 19.2x to its FY24E EPS of Rs 60. We currently have an Accumulate rating on the stock. However, we will review the Rating post the conference call," it said.
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