Lycos internet – way to digitalization

Lycos Quarter 2 – Fy16 -Results Analysis n Projections:

ALL figures are CONSOLIDATED numbers ( beware of posts highlighting standalone results with the sole intention of misguiding small investors and drive them to sell their shares)

Q2 16 metrics:July- Sep 2015 (ESTIMATED)
Revenue: INR 565 cr
PAT: INR 105.16 cr
EPS: INR 2.21

Q2 of FY15 metrics :July- Sep 2014
Revenue: INR 460 cr
PAT: INR 82.47cr
EPS: INR 1.76

April- June 2015 ( Q1 of FY16):
Revenue: INR 498.64cr
PAT: INR 90.69 cr
EPS: INR 1.9

Growth Trajectory:
SEQUENTIAL (Q2-FY16 over Q1-FY 16)
1. Revenue growth: 13.31% (565 over 498.64)
2. PAT growth: 16%. (105.16 over 90.69)
3. EPS growth: 16.31%. (2.21 over 1.9)

“YoY -Q2 Comparison (Q2-FY16 over Q2-FY 15) is as follows:
1. Revenue growth: 22.82 % (565 over 460)
2. PAT growth: 27.51 %. (105.16 over 82.47)
3. EPS growth: 25.57 % (2.21 over 1.76)

Q3-16: PROJECTIONS:Oct-Dec 2015
Revenue: INR 700 cr
PAT: INR 120 cr
EPS: INR 2.52

Estimated Yearly results FY 2016 -CONSOLIDATED

Revenue: INR 2300 Cr
PAT: INR 410 Cr
EPS:INR 8.61

If they above projections come true,

Year (FY16)on Year (FY15)”Annual Growth” Rates will be:

1. Revenue growth: 17.52 % (2300 cr over 1957 cr)
2. PAT growth: 19.88% (410 cr over 342 cr)
3. EPS growth: 19.75% (8.61 over 7.19)

The key positive triggers ( beyond the financials )to look for are :

1. Announcement about Debt Free status- VERY MUCH POSSIBLE by Feb`16.
2. Dividend announcement- ON THE CARDS after year end results
3. Growth in top and bottom lines at STAND ALONE level- Q 4 POSSIBILITY ( bottomline is already POSITIVE during Q2)
4. Announcement about SIGNIFICANT Traction on Lycos Life Sales- POSSIBLE in Q3 ( current), being the holiday season
5. Announcement about US Listing Plans
6. Positive Cash Flows- from March`15 Cash ( CA)grew from Rs 56 cr to Rs 88.7 cr
7. Trade Receivables Trajectory: FY-15 year end TR were Rs. 845cr and are now at the end of Sep 15 marginally up to Rs.878 Cr. Receivable days seemingly drifting downwards …..POSITIVE
8. Expenses Ratio:71% (403/565) vs 71.6% (357.13/498.63) in Q1 vs 74% (333/450 )year ago quarter….. POSITIVE ( 300 basis points improvement YoY)

Additional insights- Overall vs.Digital Vs Software:
1.EBIDTA Margin GROWTH:
A.Overall EBIDTA Margin seq 29.13% (164.58/565) from 28.98% (144.55/498.63). YoY from 29.06% (130.78/450.19) to 29.13% in Q2-16
B. DigitalEBIDTA Margin: seq..35.41% (162.34 /458.38) vs 37.48% (145.7/388.71)
yoy 35.41% (162.34 /458.38) vs 37.98% (130.86/344.53) in year ago quarter. Comment : Marginal drop for significant revenue gains
C.Software EBIDTA Margin: seq..2.24 /106.7 vs loss of 1.15 /109.93 yoy 2.24/106.7 vs loss of 0.08/115.7 in year ago quarter. Margin turned positive decesively.
D.Tax provisioning:Rs.55.33 cr vs 49.91 cr ( previous quarter)vs 39.91 cr (year ago quarter). Year todate – Rs 105.24 cr vs Rs.79.08 cr ( 6 m of previous FY)

Given the past behavior of stock price in the past, not venturing to give target prices:-).

BUT – Did n`t Warren Buffet share with us this wealth creation tip ?

” Stay invested as long as the company produces growing revenues and profits , QoQ, YoY, IRRESPECTIVE OF ITS SHARE PRICE MOVEMENT”.
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