Geodesic Information (CMP: Rs371)
Mkt Cap: Rs22.2bn; US$548m Bloomberg code (BVH IN)
Geodesic Information System (Geodesic) reported 18.2% qoq (+70.6% yoy) growth in revenues, the highest growth in last 6 quarters, to Rs579m against our expectation of Rs507m. The performance beat our forecast mainly because of advance received from a few enterprise customers including BenQ as initial fees for Mundu. EBITDA margins grew significantly from 64.8% in FY07 to 66.2% in Q1FY08 mainly due to the incremental fees booked from enterprise customers. Accordingly, PAT at Rs287m beat our estimate of Rs252m despite Rs36m loss on account of forex movement. Geodesic added five new clients including a large publishing house in Malaysia, a social networking site in Europe and an India based wireless service provider. Geodesic has managed to sign up with a few handset manufacturers including BenQ, Mitac and Asus and is in discussions with others, which would enable it to scale up its customer base. It is also planning to pursue initiatives to strike relationships with service providers both local as well international. Its other products including the Simputer, Spyder and Radio (could bundle along with the IM and offer to users for an annual fee rather than a one-time fee) would provide additional revenue streams. We are raising our revenue forecast by 14% and 19% and earnings forecast by only 2% (due to expected higher marketing expenses) and 24% for FY08 and FY09 respectively. At 19.4x FY08 and 11.9x FY09 earnings, we maintain out performer.
No comments:
Post a Comment