Donald, Ayush, Rohit, Sandeep and all others — excellent work….you all are doing great service to the investor community and valuepickr has progressed very well — infact at that stage where hardly few forums have reached….such interactive sessions go a long way in building/raising our conviction as also challenging our analysis again and again to check whether we are on right track or not.
Although went through the entire 2 hour session at one go but wasn’t able to absorb entire thing well because of constraints of the device on which I heard (ipad)….but still was able to pick some queries which even I have went through at the time of doing research on MPS and therefore have answers for them….Thought of putting them here for members benefit….
(1) Rgdg. Mr. Nishith Arora’s previous venture which he sold off, it was International Typesetting Corporation (ITC) which was acquired by Infomedia in 2006 at INR 52 cr.. At that time its turnover was INR 16 cr..
(2) Rgdg. size of Mr. Arora’s BPO venture before acquiring MPS (which he is talking about as operated at high margins) and its margins, maximum scale which his BPO venture reached was INR 20.2 cr. and EBITDA margin range in which it worked was 35-46 % after first year minor loss.
(3) Rgdg. peer Innodata debt status, as at FY14 it was a net cash rich company.
(4) Rgdg. volume growth, although management is fairly transparent and seems perfectly genuine, there seems to be some disconnect here. With VP team now having detailed access to management, I seriously think we need a more clear answer to this by presenting the peer data points to the management. As I have pointed previously too in this thread, SPS is having no pricing pressures and from the YoY value growth that we are seeing for Newgen, TNQ, Amnet, Crest, etc. there seems to an almost impossible case for severe pricing pressure for them as for them to achieve such a value growth with severe pricing pressure that MPS management is talking about, their volume growth should be higher than 50 % YoY which is unlikely in this industry and at the scale they are operating. This is the only point on which I feel management’s words don’t match with actual figures that we are seeing and that we need to accept being genuine analysers.
Will go through the entire session again next week and in case have any other answers to fellow members’ queries will post them.
Rgds.
Discl. – Invested in MPS.
| Subscribe To Our Free Newsletter |
