Reviews

Reviews

In this edition, we have reviewed OnMobile Global Ltd. and Redington (India) Ltd. We suggest our reader-investors to HOLD OnMobile Global Ltd. and Redington (India) Ltd. 


 

We had recommended OnMobile Global in Volume 36, Issue No. 14 dated June 7 to June 20, 2021 under the ‘Low Priced Scrip’ segment. The recommended price for the stock was Rs125.40. We had recommended the stock on account of its improving financials, growth prospects and focus on cost reduction. OnMobile Global is an Indian telecommunications company. It offers products such as videos, ring tones and games and contests. Based on current deployments, the company has over 100 million active subscribers and an addressable base of more than 1.68 billion mobile users across several geographies. Looking at the financial performance of the company, it has posted net sales of Rs130.43 crore in Q2FY22 from Rs139.97 crore in Q2FY21.

The operating profit for Q2FY22 stands at Rs9.67 crore as compared to Q2FY21 which was Rs15.21 crore. Net sales have seen a slowdown and dipped to Rs2.50 crore in Q2FY22 with correlation to Rs7.78 crore in Q2FY21. In terms of annual consolidated financial performance, the company posted net sales and operating income for FY21 at Rs551.29 crore, down by 3.69 per cent from Rs572.42 crore in FY20. Operating profit ascended by 37.55 per cent from Rs55.26 crore in FY20 to Rs76.01 crore in FY21. Consequentially, net profit climbed 68.78 per cent from Rs27.58 crore in FY20 to Rs46.55 crore in FY21. People’s lives continue to be changed by mobile telecommunications in general and smart phone adoption in particular.

In the content world, the first wave reshaped traditional content types – news, movies, music tracks and information. The second wave of change is We had recommended Redington (India) Ltd. in Volume 36, Issue No. 15 dated June 21 to July 04, 2021 under the ‘Analysis’ segment. The recommended price for the stock was Rs134.05. We had recommended the stock on the basis of considering strong demand for security, collaboration, mobility and cloud. Redington (India) provides end-to-end supply chain solutions for all categories of information technology, telecom, lifestyle, healthcare and solar products. The company generated positive cash flow from operations during the fiscal year 2021-22. It has been consistently generating positive cash flow from operations, signifying strong business fundamentals and prudent operational control. On a consolidated quarterly basis the net sales for Q2FY22 stood at Rs15,287.46 crore as compared to the Q2FY21 net sales at Rs13,763.94 crore. The other operating income was recorded at Rs457.47 crore in Q2FY22 as compared to Rs311.02 crore in Q2FY21, giving a rise of 47.09 per cent. The net profit ascended 75.27 per cent from Rs184.34 crore in Q2FY21 to Rs323.09 crore in Q2FY22. As regards its annual performance, the net sales for FY21 were recorded at Rs56,945.86 crore as against net sales of Rs51,465.17 crore reported in FY20. The net profit scaled to Rs786.61 crore in FY21 as compared to net profit of Rs533.92 crore reported in FY20, posting an increase of 47.33 per cent. The company’s business in India is derived from the enterprise segment. It has a portfolio of brands which diversifies the risk among interesting as it is about creating new content types – short texts, animated GIFs, dubbed videos and other digital creations that have been enabled by the mobile phone. This transformation and creativity present OnMobile Global with an opportunity to evolve its products, change businesses models and create new experiences for global users. It expects to play an important role in the creation, transformation, monetisation and distribution of new types of content, leveraging its large geographical footprint, substantial base of users and its deep understanding of audio content in particular. Hence, we recommend HOLD. 
 


 

We had recommended Redington (India) Ltd. in Volume 36, Issue No. 15 dated June 21 to July 04, 2021 under the ‘Analysis’ segment. The recommended price for the stock was Rs 134.05. We had recommended the stock on the basis of considering strong demand for security, collaboration, mobility and cloud. Redington (India) provides end-to-end supply chain solutions for all categories of information technology, telecom, lifestyle, healthcare and solar products. The company generated positive cash flow from operations during the fiscal year 2021-22. It has been consistently generating positive cash flow from operations, signifying strong business fundamentals and prudent operational control. On a consolidated quarterly basis the net sales for Q2FY22 stood at Rs 15,287.46 crore as compared to the Q2FY21 net sales at Rs 13,763.94 crore. The other operating income was recorded at Rs 457.47 crore in Q2FY22 as compared to Rs 311.02 crore in Q2FY21, giving a rise of 47.09 per cent. The net profit ascended 75.27 per cent from Rs 184.34 crore in Q2FY21 to Rs 323.09 crore in Q2FY22. As regards its annual performance, the net sales for FY21 were recorded at Rs 56,945.86 crore as against net sales of Rs 51,465.17 crore reported in FY20. The net profit scaled to Rs 786.61 crore in FY21 as compared to net profit of Rs 533.92 crore reported in FY20, posting an increase of 47.33 per cent. The company’s business in India is derived from the enterprise segment. It has a portfolio of brands which diversifies the risk among its product mix. Overall, the enterprise business alongside demand for cloud and mobility services led to the growth of Redington’s overseas business. Some of the key product segments that saw significant demand pull include network infrastructure, cloud, cyber security, software and licensing.

This demand was led by significant IT infrastructure and software upgrade spending by companies to fast track digital transformation in the wake of the pandemic that disrupted supply chain and businesses across the region it operates in. The group registered double-digit growth despite losing many days on account of lockdown imposed by governments across geographies. India’s self-reliance mission, Make in India campaign and productionled incentives scheme to make Indian businesses competitive in the world market will benefit the company. Hence, we recommend HOLD.

(Closing price as of Jan 11, 2022)

Rate this article:
5.0

Leave a comment

This form collects your name, email, IP address and content so that we can keep track of the comments placed on the website. For more info check our Privacy Policy and Terms Of Use where you will get more info on where, how and why we store your data.
Add comment

DSIJ MINDSHARE

Mkt Commentary26-May, 2022

Mindshare26-May, 2022

Mindshare26-May, 2022

Quarterly Results26-May, 2022

Mindshare26-May, 2022

Knowledge

Tax Column

Tax Column

Tax Queries by Jayesh Dadia, Chartered Accountant

  • Back to top