Buy Route Mobile, target price Rs 2420: Emkay Global

Emkay Global has buy call on Route Mobile with a target price of Rs 2420. The current market price of Route Mobile Ltd. is Rs 1807.8. Time period given by analyst is one year when Route Mobile Ltd. price can reach defined target.

Route Mobile Ltd., incorporated in the year 2004, is a Small Cap company (having a market cap of Rs 11331.59 Crore) operating in Services sector.

Route Mobile Ltd. key Products/Revenue Segments include Sale of services for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 438.12 Crore, up 14.69 % from last quarter Total Income of Rs 381.99 Crore and up 23.59 % from last year same quarter Total Income of Rs 354.50 Crore. Company reported net profit after tax of Rs 42.07 Crore in latest quarter.


Investment Rationale
The brokerage expects revenue to grow 16.8% QoQ/32.2% YoY on the back of seasonal strength in volume and contribution from recent acquisitions (~4% sequentially). EBITDAM is likely to remain stable sequentially; however, higher amortization charges could impact EBITM. Key monitorables: 1) M&A focus areas and updates on the performance of recent acquisitions, 2) traction in demand for new products, 3) progress made on developer program, and 4) RCS traffic monetization plan.

Promoter/FII Holdings
Promoters held 65.12 per cent stake in the company as of 12-Nov-2021, while FIIs owned 15.05 per cent, DIIs 5.88 per cent.