The high temporary software charges point to the incompetence of the management to some degree. The saving grace is that this business doesnt really require competence; and is quite idiot proof. Numerous management teams over the last 12-15 years (and the govt) have tried their utmost best to destroy the company, yet the company exits the quarter with 90+% market share.
Assuming that they are able to commission the software by the time the 63 Moons contract is to come to an end again; the incremental cost is 40 cr + 60 cr + 60 cr = 160 cr or about 2.5% impact based on todays MCap. Of course, one should provision for more slippage in timelines. If lets say they take a year from today and renew at 100 cr; then the hit would be a further 2.5%. All-in-all a 5% somewhat worst-case hit to value; while the stock is already down 6% today.
The more important metric to track in my opinion remains trajectory in options volumes which have dipped somewhat in January. Lets see how Feb turns out.
Diclosure: Invested and hence may be biased
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