Shares of Route Mobile and Affle India, on Thursday, hit their respective record highs and were frozen in their respective upper limits on the BSE in an otherwise range-bound market. In comparison, the S&P BSE Sensex was up 0.09 per cent at 51,356 points, at 01:28 pm.
Route Mobile was locked in 20 per cent upper circuit at Rs 1,527 on the back of heavy volumes. The trading volumes on counter jumped over four-fold with a combined 3.26 million equity shares changing hands. There were pending buy orders for 173,000 shares on the BSE and NSE, exchange data shows.
In the past one week, the stock has rallied 35 per cent after Route Mobile won 2 Gold Awards across categories at the 2021 Juniper Awards for Telco Innovation. The award honours leading players in the Enterprise Telecommunications, Network Security, and Anti-Fraud Markets.
Route Mobile is a leading Cloud Communication Platform provider, catering to enterprises, over-the-top (OTT) players and mobile network operators (MNO). The company’s range of enterprise communication services includes smart solutions in A2P messaging, voice, email, and SMS filtering, analytics & monetization.
The 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. The management said the next generation products in the pipeline and to be launched soon include MIDaaS (Mobile Identity as a Service), GBM (Google Business Messaging) amongst others.
Meanwhile, foreign portfolio investors (FPIs) have increased their stake in the company by 540 basis points (bps) during the October-December quarter (Q3FY1). FPIs held 15.74 per cent stake in Route Mobile as on December 31, 2020, as against 10.34 per cent at the end of September 2020 quarter, according to the data filed by the company. They held 4.32 per cent stake in Route Mobile on listing date. Mutual funds, however, reduced their stake in Route Mobile to 4.48 per cent from 8.44 per cent in the previous quarter.
Shares of Affle India locked in 10 per cent upper circuit at Rs 5,095, surging 34 per cent in one week, after the company reported a strong performance for the quarter ended December 2020 (Q3FY21) with consolidated revenue from operations grew 59 per cent year-on-year (YoY) at Rs 150.50 crore. The company’s profit after tax (PAT) increased by 42.9 per cent YoY to Rs 30.60 crore. Ebitda (earnings before interest, taxes, depreciation, and amortisation) grew 40.5 per cent YoY to Rs 38.40 crore; however, margin contracted 360 basis points (bps) to 25.3 per cent, mainly led by higher employee expenses.
The management believes the company is in a multi-year technology transformation period of accelerated consumer adoption of mobile and connected devices globally. The consumer trends offer a tremendous opportunity for further scale, ensuring the digital ad spends will continue to increase towards ROI and data focused mobile marketing platforms, it said.
Analysts believe Affle India offers a unique interplay of Digital + Mobility + Analytics theme that can offer multi-year-high-growth opportunity. Given the high growth potential for the industry/company, analysts at Dolat Capital believe discounted cash flow (DCF) valuation as an ideal tool to value real long term potential of the business. Affle remains positive about the outlook as it expects to reach 100mn conversions, Rs 100 crore in profit after tax and in CFO in FY21, the brokerage firm said. The stock however, was trading above the brokerage's target price of Rs 5,000 per share.