I had a look at the Concall and also went through Management Q&A.
My question is that if budgets remain the same annually and year after year with realizations being squeezed and volumes increasing, do the two not cancel each other out. I am a bit hesitant to see where revenue growth is going to come from unless its an acquisition.
They have grown 100% with Elsevier and 40% with Macmillan but we do not know how much of a pricing cut they had to take. For quarterly results only June 2015 quarter had YOY growth of 20%. Annually too, FY 15 had revenue growth of only 11% or so.
Agreed that the penetration is low and clients are sticky, there is no threat of new player snatching away clients but unless the budget of each client grows or the company acquires new clients i.e. from among the incumbents of publishing for which it does no work currently, then growth is going to be hard to come by.
As regards having enough cash to do an acquisition and waiting for the right target valuation and complementary skills wise, would it not be better for someone like me who has no investment in MPS to actually wait for the acquisition and then decide on the merit of the investment based on how the acquisition seems at that point of time.
I thank all of you guys for providing such excellent material for us to go through in terms of MQ and BQ insights as well as the Management Q&A.
Please do let me know if my doubts do not seem valid as this is just my opinion.
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