This is an interesting appointment that warranted a press release. It shows the importance the company places on the position( a proxy for future growth?). However, a cursory look at the LinkedIn profile shows instability with constant job hopping, with an approximate tenure of less than two years in the last five jobs.
D: Interested, but not invested.
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Management Guidance
Rategain:
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Double REV by FY27 (26 % CAGR)
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Margins Expansion 150-200 bps
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Holds over 1000 Cr in B/S
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I think this stock was treated and priced as a 80% n 40% growth company earlier n since the growth started coming down to 20% last qrtr n 18% this qrtr probably mkt not liking lower growth n higher valuation !! Been brutal! Any views on what company’s target growth rates are?
Maybe it’s due to resignation of company secretary
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I am following the stock.
Stock correction in price due to these reasons
1.Loss of business with one Major client
2.Decrease in revenue growth projection for H2FY25 from 20%to 10-12%.
3.Normalisation of travel trend after COVID boom
4.Monitoring agency CRISIL objection about QIP .
And correction is mainly due to valuation.
However management is known for conservative in nature.
Management guided that it won a big deal but can not disclose as deal is not signed yet .
It will work towards increasing revenue
I totally like the leadership under Mr Bhanu
I hold the stock… and may be biased.
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Just to add, 70% of the impact has already been seen in Q2 acc to management. I think management is being conservative here. Also given operating leverage, 15% growth would still mean highest PAT growth. I feel 700-750 levels are great entry points
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PC_-RateGain_Q2FY25_Results-_Nov_2024_20241111221651.pdf|attachment (681.6 KB)
Philip capital analysis and upgrade
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Up and down are part journey of business, how top management is behaviing is important. As DP of Zomato said in one interview - he has to remove some leader as they got too comfortable after ipo.
RG results are bad since last 2 quarters and due to that, instead of possible headwind (trump and possibly revision of hotel ind of USA), management had to cut guidance. Believe 1-2 Q may be challanging but nice to know that management is aware and taking steps.
Disc: Invested and views are biased.
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Interesting update:
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Ruhaan Chopra is Bhanu Chopra’s son and his educational credentials impressive. Hopefully he will bring in some fresh ideas.
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Did some number crunching on Rategain.
I’ve assumed a 15% growth this year and 20% growth for FY26, FY27 before coming down to 15% again without any acquisitions. On a three year time frame, this story will all be about the exit multiple it will be able to get.
You can get access to the valuations sheet here: Rategain Valuations - Google Sheets
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Assuming growth rates factored in isn’t the exit multiples considered pretty high?
Assuming they grow at those rates Mr Market will adjust the PE to lower multiples ( <=30) accordingly which will still be a PEG of close to 2 assuming 15% growth
Important takeaway: In past management under guided and over achieved.
Disc: Invested
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So I think there are two ways of looking at this.
1. From the Growth vantage: If growth does slow down it might affect the exit multiple, bringing it to the levels you expected.
2. From Business Model vantage: This company is a SaaS based company with large recurring revenues and leading SaaS metrics on LTV/CAC and GRR and NRR.
My understanding is that growth will return in the next 2-3 years, it will go beyond the 15% that they have been talking about. When this does happen, I think the companies will be looked at from the business model vantage and a better valuation could be achieved.
However this is just my view and understanding. It might turn out completely differently.
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