Route Mobile Limited (“Route Mobile” or the “Company”) is a leading Cloud Communication Platform provider, catering to enterprises, over-the-top (OTT) players and mobile network operators (MNO). Its range of enterprise communication services includes smart solutions in Messaging, Voice, Email, and SMS Filtering, Analytics & Monetization. The Company has a diverse enterprise client base across a broad range of industries including social media companies, banks and financial institutions, e-commerce entities and travel aggregators. The Company is headquartered in Mumbai, India with a global presence in Asia Pacific, Middle East, Africa, Europe and North America.
Products and Services
The Company’s unified solutions enable digital communications globally, for enterprises. Enterprises leverage Route Mobile’s swift, reliable and cost-effective channels to stay in touch with their customers.
The Company’s cloud-based delivery platform enables it to build and manage applications without having to create and maintain the underlying infrastructure for each client. The Company is, therefore, able to provide enterprises with solutions to operate applications without purchasing, configuring or managing the underlying hardware and software. The Company currently operates at a throughput capacity of over 10,000 messages per second. The Company’s six strategically located data centres provide its operations with the resilience required to meet the requirements of the clients.
3 Business Verticals:
[1] Enterprise (83% of Total Revenue): Its enterprise vertical primarily provides cloud-based communication platform to enterprises to enable digital communication through multiple channels including RCS, A2P / P2A messaging, 2Way Messaging, OTT business messaging, enterprise email and URL shortening; and Mail2SMS.
[2] Mobile Operator (14% of Total Revenue): Its main service offerings in this segment include SMS analytics, firewall, filtering, monetization and CPaaS and hubbing solutions. Its analytics-based SMS firewall solution helps MNOs identify grey route traffic terminating on their networks, block grey route traffic, identify the source of such grey route traffic, and monetize such traffic.
[3] Business Process Outsourcing (BPO) (3% of total Revenue): It Provides a range of BPO services including client support, technical support, booking and collection services. The strategic objective is to integrate its BPO capabilities with its enterprise voice platform and deliver end-to-end offerings to enterprise customers.
Financials
| Particulars | FY16 | FY17 | FY18 | FY19 | FY20 | FY21 |
| Revenue (In Rs. Cr.) | 363.61 | 457.58 | 504.95 | 844.67 | 956.25 | 1,406.17 |
| Growth | – | 25.84% | 10.35% | 67.28% | 13.21% | 47.05% |
| EBITDA (In Rs. Cr.) | 79.52 | 80.71 | 71.47 | 86.34 | 99.82 | 174.06 |
| EBITDA Margin | 21.87% | 17.64% | 14.15% | 10.22% | 10.44% | 12.38% |
| EBIT (In Rs. Cr.) | 77.03 | 75.30 | 59.02 | 69.11 | 77.14 | 148.31 |
| EBIT Margin | 21.18% | 16.46% | 11.69% | 8.18% | 8.07% | 10.55% |
| PBT (In Rs. Cr.) | 79.73 | 81.76 | 57.46 | 65.23 | 84.12 | 161.54 |
| PAT (In Rs. Cr.) | 61.03 | 60.20 | 48.69 | 56.92 | 69.17 | 133.32 |
| PAT Margin | 16.78% | 13.16% | 9.64% | 6.74% | 7.23% | 9.48% |
| EPS (In Rs.) | 12.00 | 12.00 | 9.60 | 11.20 | 13.80 | 23.10 |
| EPS Growth Rate | – | 0.00% | -20.00% | 16.67% | 23.21% | 67.39% |
| Historic P/E (Closing Price of 31st March) | 0.00 | 0.00 | 0.00 | 0.00 | 51.96 | 62.63 |
| CURRENT P/E | 79.95 | |||||
| CURRENT PE/ROE | 3.91 | |||||
| PE/ROE | 0.00 | 0.00 | 0.00 | 0.00 | 2.03 | 3.06 |
| D/E | 0.00 | 0.14 | 0.49 | 0.35 | 0.19 | 0.01 |
| EV/Sales | 0.00 | 0.00 | 0.00 | 0.00 | 4.25 | 7.70 |
| EV/EBITDA | 0.00 | 0.00 | 0.00 | 0.00 | 40.68 | 62.24 |
| Interest Coverage | 100.66 | 107.61 | 11.72 | 7.45 | 20.50 | 63.07 |
| ROCE | 108.01% | 51.86% | 23.30% | 23.14% | 24.05% | 22.72% |
| ROE | 85.57% | 47.36% | 28.48% | 25.54% | 25.58% | 20.44% |
INVESTMENT RATIONALE
Leading CPaaS Providers to Enterprises, OTT Players and MNOs
The Company is among the leading CPaaS providers to enterprises, OTT players and MNOs. The company assists enterprises in their digital communication strategy by enabling multiple channels of communication to deliver messages to their stakeholders – including customers, suppliers and employees. Enterprises can choose to communicate with the end user through select channels, for example SMS, or through multiple channels including SMS, OTT business messaging, voice and email amongst others. Pandemic has led to accelerated adoption of next generation messaging channels, including enterprise voice solutions, IP based messaging and unified communication solutions, amongst others, by enterprises.
Next generation messaging channels, viz. enterprise voice solutions, IP based messaging, email and unified communication solutions continue to witness increasing adoption by enterprises. More than 150 new customers added during Q1 FY2022, across all products.
MNO Focussed Suite of Products
The Company has been able to diversify service offerings in the mobile operator segment with the acquisition of 365squared to include SMS analytics, firewall, filtering and monetisation solutions. RML proactively help MNOs identify A2P (application-to-person messaging) revenue leakage and monetise the same. In addition, the company assists MNOs in securing their networks and improving their understanding of how A2P messages terminate on their network. Route Mobile had direct relationships with over 240 MNOs (Super Network) and provided enterprise clients with access to over 800 mobile networks. The Company partners with some of the key players across the globe.
Diversified, Global Client Base Across Industries
The Company has a diverse enterprise client base across a broad range of industries including social media companies, banks, financial institutions, e-commerce entities, travel aggregators, and other client-facing companies. In FY18, FY19, FY20, and FY21, the 10 largest clients accounted for 36%, 54%,54%, and 59% of revenue from operations, respectively.
Consistent Financial Record
Route Mobile has a number of clients on a pre-paid business model where the client pays upfront allowing it to reduce the overall working capital cycle. The Company’s revenue from operations increased at a CAGR of 29% in the last 3 years. The recurring revenue is 90% of its operating revenue.
The Company is among the leading CPaaS providers to enterprises, OTT players and MNOs. According to the ROCCO Report 2020, the Company was ranked as a tier I A2P service provider internationally. With growing internet penetration, business models are evolving and cloud communication services are being used by enterprises for streamlining back-end operations as well as for engaging with customers, employees and other stakeholders. In FY18, FY19, FY19 and FY21, through its in-house developed cloud communications platform, the Company processed more than 21 billion, 24.74 billion, 30.31 billion and 32 billion billable transactions, respectively. The Company believes its leadership position as a cloud-communication service provider is supported by its global operations with 18 location, allowing to serve its clients locally in the jurisdiction they operate.
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