Rategain - Fast Growing SaaS Leader

It was an arbitrage opportunity for them so they bought it at discounted price and sold it for a quick gain. This will have near term volatility as the shares may be exchanging weak hands, but that doesn’t change the fundamentals of the company. Also Rategain has been on acquisition spree since listing and given they now have a $135m war chest, I am sure there will be something announced in coming weeks.

Disc : Invested and bought yesterday’s dip

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“Best Airlines Rep selects AirGain to Provide Accurate Pricing Intelligence for Its Partner Airlines”(https://https/www.bseindia.com/xml-data/corpfiling/AttachLive/24684dcd-e86c-4f68-9340-998f02f4b735)

A working link for the same from company website:

Best Airlines Rep selects AirGain for Accurate Pricing Intelligence - RateGain.

India loses World Cup, but local businesses win big as tourist spending soars by 400%

Read more at:

In the latest interview with CNBC TV 18, Bhanu chopra, chairman of Rategain has indicated that the Adara revenues have reached almost near the pre-covid levels in this quarter (close to a annual run rate of 100m USD).

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Rategain has generated FCF (Free cash Flow) of Rs. 13 crore approximately in last six months (01April 2023 - 30Sep2023)?

May I request any to please confirm?

Tourist are back

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Rategain FY2024 – (concall notes and my own extrapolation).
Filing: https://www.bseindia.com/xml-data/corpfiling/AttachLive/4fafbaa9-4bae-4b3c-8221-b7e9c18d3096.pdf

  1. Revenue growth for FY24 revised to 69% vs. earlier guidance of 65%. Margin for FY24 is guided at 19.5%.
  2. FY25-FY27 – goal is to double revenue from ~1000 crores in FY24 to 2000 crores in FY27. So, revenue guidance is 26% CAGR for next three years. EBITDA margin is likely to be 25% when revenues reach 2000 crores.
  3. Daas weak – 12% growth. Large contract signed last year, this quarter only half of the quarter reflected that. So in coming quarter full impact of the same should be visible.
  4. 1000 crore cash on balance sheet – in active conversation on M&A. goal is to become integrated provider. Pricing is not correct for acquisition.
  5. Revmax platform- good momentum going from last two months. May be a game changer in next two quarters. Rev booster?
  6. Adara is 18% EBITDA margin business from losses before acquisition by Rategain.
  7. Organic revenue growth is ~30%, Adara grew 63%.
  8. Tax rate is likely to be 20-22%.

Q4FY24 based on my calculation: Q4FY24 is likely to have revenue of ~260 crores and EBITDA of 52 crores. Management has been conservative in giving the guidance in the previous quarters.
Below is my rough calculation on how 3-years will look (number are in crores other than %)

Disclosure: own it and transacted in last 30 days. I am trimming as its now over 15% of my position.
Disclaimer: I am not a financial advisor and nor a SEBI registered Analyst. The content shared here is only for learning purpose. All the names mentioned here are for example purpose. I may buy more, exit or partly sell the stock/bonds without any prior intimation.

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Good summary. You got mixed up with distribution and DaaS. DaaS has been their best performing vertical.

Now that all the acquisition led growth is accounted for, it will be interesting to see how their Q4 numbers will look like (Adara was acquired in Q4FY23) since it will be all organic growth. Frankly I feel Rategain should be able to cross the 1000cr revenue for FY24 (or come very close to it) as Q4 has historically been their best quarter. Also, the management has been always under promised with their guidance, so realistically, I will be surprised if it takes them 3 years to double their revenue, especially if they do acquire another company or 2 in the due course.

Disc : Invested and biased.

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Here’s a very casual interview of Bhanu Chopra in which he reflects about his company (Rategain) and life in general. In this he aspires to make Rategain a $1B revenue generating company.

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Q3 Fy 24 Concall (held in Feb 2024)

Increased revenue guidance to 69% from 60%
Organic growth will be 20-25% CAGR, Target to double the revenue in 3 yrs – 26% CAGR
Cash 1000-1050 cr
Actively looking for acquisition, typical range is 150-200 cr
Beat revenue and margin guidance given post IPO
our top 20 customers can give us $20 million each. Our 20 to 100 customers can give us 5 million and 100 to 1000 can get us a million
It is less than a percent in terms of revenue contribution from India

Disc: Invested

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Can someone explain, why is the ROE and ROCE of this business low (10.2% according to Screener) and should it be a matter of concern?
Typically I have seen software businesses have much higher ROE and ROCE (20+)

@pranshukh
Company has small equity of 11 cr and have cash in bank of 1000-1020 cr. with zero debt, drag down ROE and ROCE.

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RateGain Travel Technologies Limited has launched Navigator, a unified rate insights platform to help commercial teams track demand, monitor competition, and fix parity issues in a single window. The platform aims to maximize RevPAR and reduce manual efforts for revenue management, marketing, and distribution teams in the hospitality industry. With advanced analytics and AI capabilities, Navigator provides accurate demand prediction, rate trend analysis, and rate parity monitoring across various sources. The company aims to revolutionize revenue management strategies with this new offering.

Interesting optionalities playing out here.

Disc: Invested and biased

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Rategain has entered into a strategic partnership with FLYR hospitality. To my understanding this will boost revenues from DaaS and distribution segments for Rategain. Need to see how much of this translates to the top line and the bottomline for the company.

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Looks like the partnership with FLYR is quite a big deal. Although the announcement was made yesterday by FLYR, media has covered extensively today and looks like it is likely to benefit 40% of the hoteliers who struggle to manage their inventory though multiple channels. This is also a good opportunity for rategain to promote their new navigator platform and hopefully this will become a industry standard in the years to come. The biggest plus I see in near term is that the distribution segment which has been a laggard over last two quarters will start growing faster with this partnership. Posting the link for everyone which has these details in plain English. Rategain has also made this disclosure today through an exchange filing.

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:star2:Business segments:

  1. Distribution
  2. MarTech
  3. DaaS

:small_blue_diamond:Our annual recurring revenue, our ARR has now crossed another significant milestone and now stands at INR1,008.1 crores, growing at an impressive pace of 82% year over year.
:small_blue_diamond:Current portfolio: 14 Products

Read Full Q3FY24 concall highlights:https://twitter.com/Bornwinner_VJ/status/1759253917517406418