IGI Logo

Mixed operating performance

Our view

Overall, the result was below expectation as business recovery from covid induced lockdowns continue to be gradual. SMEs continue to face adverse economic environment due to frequent lockdowns. It continues to be a leader in B2B online classified with around 70% market share. We currently have BUY Rating on the stock.     We maintain BUY on the stock with revised target price of Rs 7,225 /share.

Result Highlights

* Revenue grew by 3.1% QoQ( 8.4% YoY). The muted growth was due to continued adverse impact of Covid led Lockdowns on SMEs, resulting in gradual recovery.  

* The sequential growth was mainly led by increase in the number of paying subscribers by around 4% QoQ.

* EBITDA margin was down 370 bps QoQ to 41.9% on higher other expenses (up 14.4% QoQ)

* Net profit was down 14.6% QoQ to Rs 702mn in the quarter.

* The number of paid customers grew by ~6k QoQ to 156k. Supplier storefronts grew to 7mn( up 10% YoY). Deferred revenue increased by 4% QoQ. Total products live on the platform increased by 4mn QoQ to 80mn.

* Cash and investment with the company increased by 2% QoQ to Rs 25.2bn.

* During the quarter, it also acquired 7.7% stake in Mynd Solutions Pvt Limited which operates  receivables exchange under the brand name of M1xchange; and also acquired 26% stake in Edgewise Technologies Pvt Ltd‐  offers AI driven omnichannel inventory management solutions.

Valuation

The stock trades at stretched PER of 34.1x on FY24E EPS. We expect the addition in paid subscribers to pick up going ahead led by strong value proposition and gradual opening of the economy from the covid led lockdowns. We value the stock with DCF based target price of Rs 7,225/share.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaimer