OnMobile Global – Hopes alive

Q3FY10 results review and earnings revision - ICICI Securities

Despite another poor show, in Q3FY10 too, we reiterate BUY on OnMobile on the back of expectations of growth pick-up post FY10, which is marked as the Despite another poor show, in Q3FY10 too, we reiterate BUY on OnMobile on the back of expectations of growth pick-up post FY10, which is marked as the year of investment & change in the dynamics of Indian Telecom voice-market via intense competition. We maintain our stance that short-term business profitability is likely to be muted versus historic performance; this will lead to short-term underperformance (in line with our view on Q1/Q2FY10 results). OnMobile's increasing diversification in exports market is likely to compensate for some losses from the challenged telecom market in India. Our long-term optimism stems from: i) recent export deal wins, including Vodafone Global & Telefonica (Telefonica's LatinAm wireless revenues & Vodafone's ex India emerging-market wireless revenues equal +70% and +60% of Indian wireless revenues respectively), the ramp-up from which is expected FY12 onward ii) pick-up in domestic VAS market from FY11, iii) non-linearity in business and iv) the enabling resolution to raise Rs10bn (via equity, debt or combination of both), with stated objectives of acquisitions or winning more deals such as Telefonica & Vodafone Global – any corporate event emerging from this would be big, as per management.

Source : Equity Bulls

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