Hold Route Mobile; target of Rs 1720: Emkay Global Financial

Emkay Global Financial recommended hold rating on Route Mobile with a target price of Rs 1720 in its research report dated September 12, 2023.

Broker Research

September 13, 2023 / 12:44 IST

Hold

26 Aug, 2025 12:21

Volume

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Emkay Global Financial's research report on Route Mobile

Route Mobile has steadily gained market share, particularly in India, over the last few quarters and growth momentum will be further aided by benefits accruing from: i) exclusive partnership with Vodafone Idea for International A2P SMS Services, ii) capturing higher share of message termination in India and other emerging markets from Telesign, and iii) ILD and NLD enterprise message price hikes wef 22-Apr and 1-Aug, respectively. We believe there could be some upside to the company’s current at least 20% revenue growth guidance for FY24, while it is on track to deliver EBITDAM within the guided range of 12.5-13%. Cash conversion remained weak over the last few quarters (OCF/EBITDA: 16.5% in FY23) and the few recently-signed large firewall contracts are expected to weigh on cash conversion in FY24.

Outlook

We revise our EPS by 1.7-2.3% for FY24-26E, factoring-in the better revenue growth and weaker cash conversion. We roll forward our TP to Sep-25E and retain HOLD with revised TP of Rs1,720/share, while reducing our multiple to 22x Sep-25E EPS (from 23x), given the poor cash conversion and slower scaling of the non-SMS business.

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