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r Onmobile reported improved set of numbers in Q2FY16 as compared to Q1FY16.
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Recommendation BUY
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v Q2FY16 vs 201.82cr in Q1FY16. Sales growth came even after head wind in
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LATAm currency. After consecutive 3 quarter de growth,India business saw a
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growth of around 1.6% QoQ, Emerging markets grew around 6.8% QoQ,
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Stock Details C QoQ. EBITDA margins improved by 160.50bps and came in at 19.01% in Q2FY16
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BSE Code 532944 vs 17.40% in Q1FY16. This increase in margins was mainly led by decrease in
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i NSE Code ONMOBILE
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t Inspite of an increase in the tax, higher amount of Ebitda led to growth at PAT
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i Bloomberg Code ONMB IN level. PAT margins Expanded by 68.8 bps and came in at 0.61% in Q2FY16 vs
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b Market Cap (Rs cr) 1034 -0.08% in Q1FY16.PAT came in at Rs 1.26cr in Q2FY16 vs a loss of Rs 0.16cr in I I Q1FY16. Tax amount came in higher at Rs 8.46 cr in Q2FY16 vs Rs 6.24 in Q1FY16
Free Float (%) 53.46% m m due to the higher forex gain arising in Brazil and also due to tax on annual 52- wk HI/Lo (Rs) 116.35/33.5 dividend income from Bangladesh subsidiary .
e e Avg. volume BSE
207750 YoY basis, too company financials have improved.Although sales have declined v v (Quarterly) by 0.23% YoY and came in at 206.98cr in Q2FY16 vs 207.5cr in Q2FY15, Ebitda
Face Value (Rs) 10.0 o o margins have expanded by 749.55bps. PAT margins have turned from a loss to
Dividend (FY 15) Rs. 1.5 per share profit and have expanded by 119.20bps.PAT came in at Rs1.26cr in Q2FY16 vs a N N Shares o/s (Crs) 10.94 loss of Rs 1.21cr in Q2FY15
Relative Performance 1Mth 3Mth 1Yr In RBT space, onmobile won new deal from Airtel Nigeria which will help 2
2 Onmobile to increase its coverage in Africa to 50 million. In India, onmobile won
Onmobile 7.16% -7.50% 190%
western circles from Airtel for RBT which has increased its reach in Airtel from –
– Sensex 1.29% -5.78% -2.88% over 60 million subscribers to over 115 million subscriber. The new deal wins
shows that Onmobile is showing good growth in RBT sapce. The new App based e
e customer friendly RBT product which will be launched by Onmobile in different t t geographies is likely to add growth going forward. Onmbile has launched similar
a kind of product named “yavoy” in Spain. Currently, Onmobile has over 70 million a subscribers of RBT.
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d In Non RBT space i.e. CVAS business, Onmobile has started moving into different p p geographies. Recently Onmobile,won 2 CVAS deals in Srilanka each with a
subcriber base of 8 mn. Other than this , the company has also launched CVAS U
U Shareholding Pattern Sep 15 product in one of the operators in India. This shows that CVAS business is
showing good traction and we expect onmobile to show good growth going t
t Promoters Holding 46.54% l l forward. Institutional (Incl. FII) 15.63%
Going Forward, we expect the company’s sales to decline by 0.46% and then u u 10.65%
Corporate Bodies grow by 12.03% in FY16E and FY17E respectively, but PAT to grow from Rs 9. 71 s
s Public & others 27.18% cr in FY15 to Rs 114.4 cr in FY17E. We have not factored in any growth in e e Akansha Jain – (+91 22 3926-8034) revenue from emerging business opportunity from new under developed
product by the company. We have upgraded our estimate post Q2 result and R R Research Analyst [email protected]
expect company to do Ebitda of Rs 195.18 cr and EPS of Rs 10.46 in FY17E and is Sunil Jain – (+91 22 3926-8196)
trading at EV/Ebitda of 3.17x and PE of 9.08x FY17E EPS. We recommend to BUY 6 6 Head Research Analyst Onmobile with target price of Rs 125 (31.58% stock return) in a years time
1 Y
Y Year Net Sales Growth % EBITDA Margin % PAT Margin% EPS PE EV/EBITDA ROE % F F FY14 865.31 19.31% 133.64 15.44% -12.55 -1.45% -1.10 -86.5 7.85 -1.64% 847.05 -2.11% 134.44 15.87% -29.04 -3.43% -2.66 -35.7 6.04 -4.42%
2 FY15 2
FY16E 843.18 -0.46% 160.20 19.00% 9.71 1.15% 0.89 107.1 4.42 1.50% Q Q FY17E 944.65 12.03% 195.18 20.66% 114.47 12.12% 10.46 9.08 3.17 15.43%
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Net Sales 206.98 207.5 -0.23% 201.82 2.56%
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i Total Income 206.98 207.45 -0.23% 201.82 2.56%
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i Cost of sales and services 77.27 68.25 13.22% 75.28 2.64%
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t Gross Profit 129.71 139.20 2.51% 126.54 2.51%
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n b I I Gross Margin (% of net sales) 62.67% 67.10% -443.26 62.70% -3.15
Employee Expenses 55.47 72.63 -23.63% 57.70 -3.86% m
m Other Expenses 34.90 42.69 -18.25% 33.72 3.50% e e Total Expenditure 167.64 183.57 -8.68% 166.70 0.56%
v EBITDA 39.34 23.88 35.12 12.02% v
% of net sales 19.01% 11.51% 749.55 17.40% 160.50 o o Depreciation 37.10 36.24 2.4% 37.27 -0.5%
EBIT 2.24 -12.36 -118.1% -2.15 -204.2%
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Interest 0.48 1.03 -53.40% 0.49 -2.04%
PBT & OI 1.76 -13.39 -113.1% -2.64 -166.7% 2
2 Other Income 3.42 12.66 -73.0% 3.45 -0.9%
Forex 4.54 6.91 -34.3% 5.27 -13.9% –
– PBT 9.72 6.18 57.3% 6.08 59.9%
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e PBT After Exception 9.72 6.18 57.3% 6.08 59.9% t
t Tax 8.46 7.39 14.5% 6.24 35.6% a a Tax / PBT 0.87 1.20 1.03
Net Profit 1.26 -1.21 -204.1% -0.16 -887.50% d
d % of net sales 0.61% -0.58% 119.20 -0.08% 68.80 p p Adjusted Net Profit 1.26 -1.21 -0.16
Equity 109.42 114.25 109.29 U
U EPS (Unit Curr.) 0.1 -0.1 0.0
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6 India 46.3 57.6 52.1 51.36 44.40 45.10 1
1 Latin America 51.2 51.9 48.9 44.5 40.18 39.58 Y Y Emerging Market 32.5 35 36.9 35.5 34.90 37.30
Developed market 68.7 63 88.92 82.64 82.34 85.00
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Total 198.7 207.5 226.82 214 201.82 206.98 2 2 Outside India 152.4 149.9 174.72 162.64 157.42 161.88
Q Q Source: Company data, Nirmal Bang Securities
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e Disclaimer:
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a Nirmal Bang Securities Private Limited (hereinafter referred to as “NBSPL”) is a registered Member of National Stock Exchange of India Limited, a
Bombay Stock Exchange Limited and MCX stock Exchange Limited. We have been granted certificate of Registration as a Research Analyst with d d SEBI. Registration no. is INH000001766 for the period 23.09.2015 to 22.09.2020 .NBSPL or its associates including its relatives/analyst do not
hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst (in case any financial interest is held kindly
p p disclose) NBSPL or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve
U months. NBSPL /analyst has not served as an officer, director or employee of company covered by Analyst and has not been engaged in market
U
making activity of the company covered by Analyst. The views expressed are based solely on information available publicly and believed to be true. t
t Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.
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s Nirmal Bang Research (Division of Nirmal Bang Securities Pvt. Ltd.) s
B-2, 301/302, Marathon Innova, e
e Opp. Peninsula Corporate Park, R
R Off Ganpatrao Kadam Marg,
Lower Parel (W), Mumbai-400013 6
6 Board No. : 91 22 3926 8000/8001 1 1 Fax. : 022 3926 8010
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