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Inline performance with strong traction in Platform segment

Our view and valuation

Overall, inline performance on both revenue and margin front. The fourth quarter generally has weak seasonality compared to third quarter on account of several promotional campaigns in December quarter, driving up A2P messaging. The Wisely platform coming live is a positive development and would drive revenue growth for Platform segment in FY23. It remains a leader in CPaaS space in India, growing faster than the industry. The adoption of CPaaS based A2P messaging across industries continues to drive volume growth for both enterprise and platform segments. We expect EBITDA margin to improve going ahead led by Platform segment(higher gross margin) growing faster than enterprise segment. We estimate revenue CAGR of 26.0% over FY22‐FY24E with average EBIT margin of 21.4%.

We maintain BUY Rating on the stock with revised target price of Rs 1,867 per share, based on 30x on FY24E EPS. Trades at PE of 23x on FY24E EPS.

Result Highlighs

Revenue grew by 31.5% YoY( down 3.6% QoQ) to Rs 8,531 mn.  Q4 has weak seasonality compared to Q3 and hence YoY comparison is preferred. The robust YoY growth is led by increase in volumes from BFSI, Retail and Government verticals and faster growth in OTT channels.

Enterprise revenue grew by 30.2% YoY to Rs 7,844mn; while Platform business grew by 48.7% YoY to Rs 687 mn, led by TRUBLOQ.  Gross margin of platform business was flat YoY for the quarter at 94.6%; Gross margin for Enterprise business was up 60 bps YoY to 22.7%. As a whole, Gross margin was up 126 bps YoY( down 100 bps QoQ) to 28.5%

EBITDA margin was up 90 bps YoY ( down 130 bps QoQ)to 21.6%. The sequential dip in EBITDA margin was due to investment in sales team and participation in events like World Mobile congress

TRUBLOQ proceeded 32 bn transaction in March at daily average of 1.06bn, with 63% volume market share.

VIL is now live on Wisely platform, would cater to international messaging traffic.

Recommended a final dividend of Rs. 2/‐ per equity share of Face Value Re. 1/‐  each (200%) for the financial year ended March 31, 2022, subject to approval of shareholders

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