Buy Route Mobile; target of Rs 1700: Emkay Global Financial

Emkay Global Financial is bullish on Route Mobile has recommended buy rating on the stock with a target price of Rs 1700 in its research report dated January 28, 2025.

Broker Research

February 03, 2025 / 21:05 IST

BUY

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Route Mobile

We upgrade Route Mobile to BUY from Add, given favorable risk reward following the 21%/26% correction over 3M/6M and healthy OCF yield (7% annualized for FY25). Route’s Q3FY25 operating performance was mixed. Revenue growth of 6.3% QoQ was broadly similar to our estimate. Growth was impacted by a slightly subdued festive season and industry-wide headwinds since H2FY24. Billable transactions dipped 4% QoQ due to lower domestic volumes (lower share from a single bank). Reported EBITDAM (11%) was impacted by higher employee expenses (introduction of a long-term incentive plan) and forex loss (of ~30bps). Adjusted EBITDAM declined by 20bps QoQ to 11.7%, lower than our estimate.

Outlook

The mgmt highlighted it targets 15% revenue CAGR over the next 3 years. It endeavors to deliver a better performance in Q4 versus Q3, and continues to drive industry-leading growth over the medium term. We trim FY25-27E EPS by 2-5%, factoring in the Q3 performance and slower margin trajectory. Our TP is unchanged at Rs1,700 (22x Dec-26E EPS).

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