Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Route Mobile - Acquisition to help add marquee clients - ICICI Securities

Posted On: 2021-05-01 05:19:11 (Time Zone: UTC)

In-line with the recent consolidation within CPaaS space as highlighted in our Initiating Coverage note, Route Mobile (RML) has announced the acquisition of Phonon Communications. Phonon is engaged in customer experience solutions by providing Contact Centre as a Service (CCaaS) platform to its clients. In addition to broadening RML's offerings, this acquisition also helps the company with a foot-in-door of various marquee accounts (leading banks and airliners), providing a cross-selling opportunity. Further, this acquisition should be margin accretive as CCaaS typically operates at higher margins. We estimate the payback of the acquisition to be 5-6 years without factoring in any potential synergies. Maintain ADD with unchanged TP of Rs 1,710.

- Salient points of the deal. RML will acquire Phonon for Rs290mn in an all-cash deal. Phonon's revenue in FY20 was Rs 170mn and the transaction is estimated to close by May'21. We estimate revenues of Phonon in FY21E to be impacted due to lower throughput by travel clients.

- Marquee client list and leadership positioning in Indian travel segment. Phonon serves marquee customers such as Citibank, HDFC Bank, Yes Bank, HDFC Life Insurance, Royal Sundaram General Insurance, Air Asia (India), GoAir, IndiGo, Vistara, Yatra, ITC Hotels and Sodexo. Further, the company is one of the key players in automated interaction space within Indian airline working 4 of top 5 players as clients. Phonon has carried out 1bn+calls in FY21 with a capability to reach the end customer via voice, email, SMS or rich media.

- Maintain ADD. We believe Phonon acquisition will provide both revenue and margin synergies as RML will have access to the wide pool of Phonon clients enabling cross-sell opportunities for RML with higher margins to come from a better product mix. Considering the aforementioned, we estimate the IRR of the transaction to be ~15% (ex-synergies) with a payback period of 5-6 years. Given its size, we believe, though Phonon acquisition will be a tuck-in, it will provide a meaningful value proposition to RML's product offering. Key risk includes integration of Phonon offerings to Route CPaaS platform. Maintain ADD with a target price of Rs1,710.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020