Challenges to name a few:
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Company intends to grow in US market (which is the main reason for going to SME IPO), However not easy to crack US market
- Timezone difference makes it challenging for active engagement
- Any possible extenstion of it like in-person engagement would be extremely impossible (assuming the cost involved, turn around time for F2F etc), So it must be restricted to engagements which they are sure of 100% remote consultation with experts.
- Very mature market with very well established players and space is very crowded. Difficult to standout in the crowd.
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Extremely tied with economic activity (meaning cyclical), now the going is good - so enjoying. But during economic stagnation and/or recession, this business has to sit out for better days.
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No exclusivity either with experts or the client. Hence there is really no moat - except the data (skill set of expert and requirement for client) acquisition and mapping between expert and clients.
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Not sure, how they would be able to manage the inflation - i.e cost to experts and internal escalation of the cost - as it is very competitive market with no moat. So we should expect all the returns to normalize to around 15~20% in longer run - from current 40% (ROE and ROCE)
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Though the company has tried to expand to multiple pillars of growth for now - only Expert Calls seems to be contributing majorly for both the topline and bottomline.
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Any long duration engagement may mean that client can circumvent the company and have direct relation with the expert. Hence this would mean company focusing on short term duration project - which may also mean - not longer term visibility into revenue stream.
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Top few clients gobble up major portion of revenue stream for the company - which may indicate inability of a deeper and wider penetration by the company.
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