Route Mobile Ltd - IPO Note - Subscribe - Geojit

A prominent player in digital communication space...

Route Mobile Ltd (RML), incorporated in 2004, is a Mumbai headquartered leading Cloud-communication platform provider, catering to enterprises, over-the-top (OTT) players and Mobile network operators. Their product portfolio includes smart solutions in Messaging, Voice, Email and SMS filtering, Analytics and Monetization. RML is one of the most prominent and largest CPaaS (cloud communication platform as a service) players in the world, especially in Asia, Africa & the Middle East. RML has ~300+employees and has served over 30,150 clients, since inception. They have access to 800+ networks across the globe, 255+ direct connections to Telecom operators and 3,000+ active monthly billable clients.

- As per ROCCO report 2020, RML is ranked as a tier one A2P (application to peer) service provider internationally.

- Close to 85% of revenue is generated from export markets like Africa, Europe, Middle East and North America.

- Company uses a prepaid business model where client pays upfront helping in reduced overall working capital cycle.

- For FY18-20, revenue grew at a CAGR of 38% due to its association with marquee clients while the PAT grew at 22% CAGR.

- In Q1FY21, RML reported a profit of Rs.27cr on revenue of Rs.310cr and, as per management, company was able to manage traffic during the pandemic.

- At the upper price band of Rs.350, RML is available at a P/E of 28.8x and when we annualize Q1FY21 numbers we arrive at a P/E of 18.5x for FY21E on a post issue basis. Given that there is no listed peer to compare, and based on stable financial performance and niche business model, we assign a subscribe rating on this IPO.

Source : Equity Bulls

Keywords