Also one question I would like to ask here? (Its a bit naive, don’t mind)
Why is the tax rate % for Izmo so low?
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- Izmo’s ROCE of 8.5 against the Software industry average of 13%.
- now through geronimo it can reach 4K dealers through 35+ countries.
- Cant understand the frog data valuation. while trendlyne gives nice valuation score ( which i think may not be right always)
Since yesterday HFTs have became active at the counter. CMP has gone nuts in past week, is it only me who thinks information is scarce on IZMO ?
Anyone with more information on recent price movements ?
D-Holding.
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Any insight on Arcstone the Mauritius based institutional investor in the company. The fund is a small cap fund has currently has only 1 other portfolio company. Margins have shown wild swings with disporpotionate changes in margins at different levels. Can see auditors comments on uncertain tax positions, 100% of loans given to RP - repayable on demand or without specified repayment terms etc. See these as red flags - would appreciate insights.
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izmo Ltd. Launches izmo Micro: India’s Leading System-in-Package (SiP)
Manufacturing Facility, Now OperaƟonal in Bangalore.
Entering into Semiconductor space
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In June call they were talking about this subsidiary being for EV/BMS etc…Some quick turnaround of thought process and execution !! Maybe the biggies like Kayanes, Tata’s should learn from them.
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Izmo is the company that made my realize that a stock’s true value unlocking rests on a good PR. Their IR adfactor is not doing a good job IMO.
Highlights from their recent Q2 FY25 con call that makes me believe stock is significantly undervalued at the current valuation
- They recently sold land worth 30 cr which will be used to fuel internal capex
- Izmo micro will focus on building micro chip packets for various usage in a car - one primary usage includes tire pressure system- the segment needs capex of 20-25 cr to build revenue of 200 cr. Next year they are going to do a revenue of 40-50 cr from the segment. Gross margin of ~40%
- They are building self driving software with an OEM. That’s huge for a small company like Izmo, capability to build something like this on its own should be worth a 4-500 mn USD
- Frog data - dark horse for them, they have parked the fund raise for the right valuation. 10-12 mn revenue run rate target in the next 9-10 months. Where they go for a fund raise divesting 25-30% stake in the business. Frog data will continue to grow at 70-80% CAGR
- Continued growth of 25-30% rev cagr for the foreseeable future on account of the above
- Margin decline is on account upfront hiring of manpower. Operating leverage leading to a normalisation going forward and return to sustainable previously reported margins
The business should likely to continue performing well going but my views are biased as I am already an investor in the business
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Few other things that have improved in Izmo
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Founder stake has improved to 35% with promoter mentioning maybe in future to 40% depending upon availability of funds
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Number of employees have been constantly increasing with last number in July 2024 being 398
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Geronimo acquisition has given it markets of UK, Brazil and Argentina and also Ford as a customer to which they want to cross sell
SIP assembly new division and Frog AI make this company a very interesting company
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the management since the past 1-1.5 yrs were saying they were looking to raise funds for frog data but now they want a higher valuation when the market is looking weak for the foreseeable future.
Also jumping on hot sectors first in defense now in AI and EV components makes me believe this is a bull market story.
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I was also wondering the same. Did you get the answer?
The warrants were issues at 88 which was almost at 75% discount to the share price that time. The last time it traded at 88 was in 2022. What do you think of it? How should this be taken as?
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To me this looks normal practice, when the company anticipates continued growth.
This can boost liquidity and increase market visibility.
But basically its dilution and its to be watched if insiders start selling.However if we look at promoters holding it appears they are continously buying instead of selling.
@Vineetjain111 @Vidhyut_Bhawnani
Afterall if izmo is doing 500 cr FY 25 and insiders now owning 45%. I am only seeing positives…may be because i am holding it ?
However even after holding for 2 year i still dont have a clue about it growth outlook 
.
Thanks for your inputs…Can you also help me understand
- Why their tax rate is so low? And is it expected to remain the same?
- What do you think about their foray into semiconductor? Do they have enough capabilities and demand for what they will be doing?
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This is what management had to say about tax rate in their concall
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They have working relations with many OEM, they might be able to crack a few deals. But it is a completely new vertical and so management execution needs to be seen. Moreover the management have been poor in executing their guidance. So I will take their guidance in the new semiconductor business with a pinch of salt.
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Was trying to search thru companies that could benefit from lower cost AI that Deep Seek now brings to the table. Asked AI to answer a few questions and here is the summation.
Will be great if someone who understands Frog Data better could throw greater light on this as I am no expert on this topic. The response is below:
Lower-cost AI technologies like DeepSeek can significantly benefit FrogData by enhancing its AI-Connected Dealership Platform and overall operational efficiency. Here’s how:
Enhanced Decision-Making Capabilities
Advanced Data Analysis: FrogData’s platform already utilizes a structured data repository to manage vast amounts of dealership data, allowing for improved decision-making in areas like used car pricing and customer engagement. Integrating lower-cost AI technologies can further enhance these capabilities, enabling more sophisticated data analysis and predictive modeling, which can lead to better business insights and strategies
Cost Efficiency: With DeepSeek’s reduced costs for AI services, FrogData can implement advanced analytics without incurring high expenses. This financial flexibility allows them to invest in additional features or improve existing functionalities within their platform, making it more attractive to dealerships looking to optimize operations and profitability.
Competitive Advantage
Market Differentiation: By leveraging lower-cost AI technologies, FrogData can maintain its competitive edge in the automotive industry. The ability to offer cutting-edge solutions at a lower price point can attract more dealerships to their platform, expanding their market share
Innovation in Services: FrogData’s recent upgrades to its AI Factory demonstrate a commitment to innovation, focusing on areas like service management and sales negotiation. Incorporating cost-effective AI technologies will enable them to continuously enhance these services, providing dealerships with tools that improve efficiency and customer satisfaction[2]
Scalability
Broader Reach: Lower-cost AI solutions allow FrogData to scale its offerings more effectively. As they enhance their platform with new features powered by accessible AI technologies, they can cater to a wider range of dealership sizes and needs, from smaller operations to larger enterprises
Integration of New Features: The integration of affordable AI technologies can facilitate the development of new features within FrogData’s existing systems. This includes advanced reporting tools and automated decision-making processes that streamline operations for dealerships.
Conclusion
In summary, lower-cost AI technologies like DeepSeek are likely to bolster FrogData’s capabilities in the automotive sector by enhancing decision-making, improving cost efficiency, maintaining competitive advantages, and enabling scalability. As FrogData continues to innovate its AI-Connected Dealership Platform, these advancements will position it favorably within the rapidly evolving automotive retail landscape.
Disclosure: Invested, Biased, Post for educational purpose only, i am not a SEBI registered Analyst
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Does anyone have any idea, Why it is hitting lower circuits every day despite having decent results and valuation.
Company is trying new things to bolster the growth.
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No change in business but more to do with state of the markets.
Bear markets arguements:
1.US based fund raising of Frogdata to get impacted.
2.Not much visibility of new business other than cash burn.
3.On core earnings basis why should the stock trade at greater than 10x or 12x PE?
Please note that above is thinking when times are tough as in currently
When the tide turns or numbers suprise bullish arguements will be:
- Frogdata gets operational boost from AI and gets a lot of interest from potential PE investors.
- First mover advantage in the Semiconductors Packaging Business and great roadmap to scale.
- Rare to find such companies and some high Price to Sales multiple.
Also in near term ESM 2 doesnt help.
There is no first mover advantage wrt Semiconductor packaging, there are already quite a few doing it in India.
Here is my take. I am new to the forum. Others may add, correct and advise , it will be helpful. Some of questions to be asked
- How Izmo is leveraging its core asset. Is it able to do that effectively. Are products built around the image library driving present and future growth
As per management commentary Q4FY25, Not going to be high growth business. Most of the growth to come from Frogdata and Izmo Micro systems. As per management there is headroom to grow in US and Europe - Is there synergy with Geronimo and Frog data (Fixed operations, 1 case study for used vehicle sales): Especially in the context of Fixed operations which is Frog data stronghold, (FDAP)
a. Geronimo Synergy: Acquisition has led to increase in employee cost. Revenue side synergy to come from cross selling products to OEM clients such as Ford (12.6 Cr annual GBP 1.2M revenue to 30 Cr, 3 Mn Euro revenue in FY26). Geronimo can provide synergy through cross selling and revenue increase as it is in the same domain
b. Frog data
i. Decision Analytics Platform (FDAP):
Data Integration & Management: Aggregates dealership data (DMS, CRM, service, accounting, web analytics) into a centralized data lake
Business Logic & Decision Algorithms: Transforms raw data into actionable, in the moment insights via ML/AI decision models
Visualization & Dashboards: Offers over 400–800+ customizable reports and dashboards across departments—sales, F&I, fixed ops, inventory
Prescriptive Analytics & Decision Support: Enables frontline managers to take immediate actions like pricing adjustments or labor optimization
Deployment: Marketed as a cost-effective, fully managed flood in solution that reduces reliance on spreadsheets
ii. Used by 1,000+ dealerships across major brands (Ford, GM, Toyota, BMW, etc.) and Ford has reported improvement in ROI. Based on management commentary there are 16,000 in US dealers and another 19,000 in Europe
iii. Synergy: Winnerford, First Team website has photographs of cars at their site. Do not think they would like to change that for used and new cars. 3D visualization cross selling is a possibility. However, synergy at the end of Frogdata fixed ops not clear as mostly it deals with spare parts and consumables which may not be appealing. For sales Izmo may provide images and visualizations and Frogdata may get consumer insights based on preferences. For Izmo solutions frog data can extract useful information and provide insights for Izmocars, Digital retail front end websites with backend analytics, predictive insights, engagement analytics. Izmo more likely to benefit from Frogdata than the other way. However Frogdata core competency is Fixed ops. Therefore, not full synergy expected especially no cost synergy only revenue synergy only for izmo products is possible
iv. Also, there is plan for divestment of Frog data. Based on current earnings the NPV of the company is between 170-200 Cr based on various permutations. If Izmo is looking for valuation of 700 Cr it is at high premium (118 PE FY24). Market is not finding the offer appealing. - Izmo Micro: Silicon photonics which is still in early stages. However management aspires to reach 200 cr revenue in 3 years
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Izmo is one of the 3 industry collaborators for silicon photonics in CoE-CPPICS IIT Madras as Photonics Chip Packaging Partner. Others are
Foundry Partner: Silterra
Design and Testing Partner: Keysight Technologies
Therefore what is the level of understanding. Who will own chip design. What is the commercialization outlook : Will izmo be the sole entity for Packaging. What is the roadmap for 200 cr revenue through silicon photonics.
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