Management has done a laudable job of integrating and driving to growth all the businesses bought in last few years. Delay and customer decisions do impact business and has to be taken as known risk. Having an aspirational growth plan is a directional plan. Revenue projections and risk is blended in Management/ Analyst projections and aspirations. Dividend yield and growth has been decent for the current valuation.
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@ap1990
MPS Q3 numbers were clearly disappointing, more so as the mgt. had needlessly upped the guidance just a qtr ago. The numbers themselves were not that bad, with operating margins getting better despite the set back in the e-learning business. I guess the mgt too has learned its lessons & will hopefully, going forward, let their numbers do the talking! I guess the the pressure of having concalls after every quarterly numbers also gets to the mgt whose enthusiasm to please shareholders can sometimes get the better of their judgement! The mgt. though has stayed committed to their vision 2027 of 1500 crs, & hope to actually achieve it before time with similar margins.
I am of the view that the mgt. is well meaning & have by & large walked the talk over the last 7-8 qtrs, which is a sufficiently long time. I also believe the the mgt. has the wherewithal & ability to grow inorganically by successfully acquiring companies & then integrating them. That is what will create shareholder value in the long run. It matters less that the vision 2027 is realised 2-3 quarters behind schedule but the journey forward should clearly show a pattern in that direction.
The Co. is generating free cash flows of about 130-150 crs annually. Has given a interim dividend of Rs. 30/-, & could easily give another similar final dividend (I think the mgt has mentioned something to this effect in the previous concall, admittedly to be taken with a pinch of salt!) That would make the stock give about a 4% dividend yield.
I feel any meaningful correction from current levels of about 1490 could present a decent buying opportunity & I will look to add.
Disc: Invested
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Had noticed the same arrogant streak in Rahul A. He has told shareholders multiple times that they can sell out which is not a mature statement. But there have been arrogant business leaders who have been successful - e.g. Steve Jobs. Also the business model of the company is a bit strange - it is basically acquisitions. There is no real organic growth in the company. But what works is that they are ambitious, good governance and lots of cash flows
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Same statement different perception. I take it as we are focused on business and not on stock price. As a investor you have a choice to shift your money where you feel you get better proposition.
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Question regarding the latest acquisition of AJE:.
Does AJE have any debt that MPS is going to takeover?
I did not see any info on the debt on the books of AJE.
YES, No announcement!!!
But acquisition is good case study and how AJE + AJO business will be coming in line with MPS margin.
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https://www.ndtvprofit.com/research-reports/mps-aje-acquisition-deepens-content-capabilities-b2c-access-do
Dolat_Capital_MPS_Company_Update.pdf (498.5 KB)
lat-capital
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Q4 Concall;
Question : What white spaces do you still see now on those three verticals we operate and where we’re trying to get more acquisitions? We have a full book of products. Now the only thing is that we have to scale up. And you are contradicting that. You are saying that we still can go for more acquisitions or whether they will be bolt-on acquisitions or whether they will be in the same area just to ramp up the scale?
Answer by Rahul Arora: More than most, yes. I would not say from a capability standpoint we possess everything… There are still opportunities for capability expansion that allow us to move up/down the value chain. So we’re looking at those types of opportunities.We’re looking at opportunities that expand our geographic reach as well. For example, in FY’24, we expanded into Australia, New Zealand, as well as in China. There are still regions like, the Middle East as well as Latin America that we’re not currently very strong in. Also, certain parts of Europe where we’re not very strong. So there’s a geographic play that we’re looking at as well.
We are also looking to actively accelerate the education space. Today in the education space, a bulk of our revenue comes from K-12 as well as through publishing and our goal is to scale that into higher ed and specifically within higher ed within adult learning and educational institutes. So there’s still much juice left for us to acquire in terms of capability expansion, geographic expansion, as well as adjacent market expansion. So we’re looking at all three sectors.
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Page 5 of the Annual Report of the Financial year 2024:
Quick View of FY25
We will build on the success achieved with our market-based approach in our Research business and apply the lessons learned to the Education and Corporate sectors. Our goal is to increase our STAR accounts to 100 by the end of FY25, which will bring significant progress in terms of our organic growth and margins. We anticipate seeing returns from our investments in new capabilities in 2022 and
2023. Additionally, we plan to launch an enhanced version of DigiCorePro, AI-powered solutions for Accessibility and Translation, and a SaaS platform for Immersive Learning. We remain committed to our updated acquisition strategy and will continue to prudently allocate capital that should further our growth agenda in FY25 beyond what we see today.
FY25 will be an inflection year. By the end of FY25, we aspire to reach the halfway mark on Vision 2027
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