Route Mobile (RMOB) Shares Plunge 5% After Q4 Results: Expert Analysis on Whether to Buy or Sell

• Route Mobile’s share price experienced a 5% drop in Tuesday’s trading session, following a 9% decrease in Q4 profits to ₹95 crore.
• Compared to the same period last year, the company reported a net profit of ₹104.05 crore, according to a BSE filing.
• Ruchit Jain of 5paisa suggests that the stock may underperform in the near term due to its recent breach of the support end.

Route Mobile’s share price drops following a decline in Q4 profits, with experts suggesting potential underperformance in the near term. The stock’s next support is around the ₹1,400 mark.

Route Mobile’s Q4 Performance

Route Mobile’s share price opened at ₹1,486.55 apiece on BSE today. During the day, the stock hit an intraday low of ₹1,460.55 and an intraday high of ₹1,500.40. The company’s Q4 profits fell by 9% to ₹95 crore, compared to ₹104.05 crore during the same period last year. The stock has been consolidating in a range for the last couple of months and has now breached the support end, according to Ruchit Jain of 5paisa. As a result, the stock may underperform in the near term. The next support for the stock is around the ₹1,400 mark.

Annual Revenue and Profit Growth

Comparing the revenue from operations for the March 2023 quarter to the previous one, which was ₹1,017.03 crore, there was almost no change. However, net profit climbed by around 17% to ₹388.84 crore in FY24, up from ₹333.11 crore in FY23. On an annual basis, revenue grew from ₹3,569.23 crore to ₹4,023.29 crore.

Route Mobile’s Future Outlook

Route Mobile’s performance in Q4FY24 was in line with Brokerage Nuvama Institutional Equities’ assessment. The muted increase observed is due to the migration of ILD volumes to OTT platforms. The 12.5% EBITDA margin exceeded their projected 12.1%. Route had difficulties in the ILD business as volume migrated from SMS to OTT platform in FY24. However, it is likely to benefit from the volume from the Vodafone Idea agreement as well as revenue synergies with Telesign. The brokerage retains a ‘BUY’ rating with a target price of ₹2,020, valuing the stock at 25x FY26E EPS.

Conclusion

Despite the recent drop in share price and Q4 profits, Route Mobile’s annual revenue and profit growth show promise. The company’s future outlook remains positive, with potential benefits from the Vodafone Idea agreement and revenue synergies with Telesign. However, investors should remain cautious due to the stock’s recent breach of the support end.