Arihant Capital's research report on Route Mobile
Route Mobile Limited reported strong set of numbers in Q3FY21 beating our estimates on all fronts. Revenue from operation grew by 46% YoY & 10% QoQ to Rs 3,848 mn against our estimate of Rs 2,710 mn due to strong performance across all geographies. EBIDTA grew by 21% YoY & 6.7% Q0Q to Rs 446 mn against our estimate of 290 mn EBIDTA margin contracted by 241 bps YoY & 38nps QoQ to 11.6% Higher operating expenses backed by rise in purchase of messaging service expense and employee benefit expense put pressure on margin. PAT grew by 117% YoY & 15% Q0Q to Rs 376 mn against our estimate of Rs 170 mn supported by healthy top line growth, higher other income and lower finance cost. PAT margin expanded by 322 bps YoY and 41 bps QoQ to 9.8%. For 9M ending 31st December 2020 Revenue from operation grew by 51% YoY to Rs 10437 mn. EBIDTA grew by 66%YoY to Rs 1241 mn. PAT grew by 124% YoY to Rs 972 mn.
Outlook
We value the stock at a P/E multiple of 60(x) to Its FY22E EPS to arrive at a target price of Rs 1437. Which gives a potential upside of 27% from the current level. We upgrade our rating from Accumulate to Buy.
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