'Buy' One Mobikwik Systems, Maintains Dolat Capital Post Q1 Results — Check Target Price
Noting Q1 miss and slower than expected deployment of IPO proceeds to drive growth, Dolat Capital lowers revenue estimates by 9%/7%.
(Photo: Vijay Sartape/NDTV Profit)
Mobikwik’s payment business remains robust, and user as well as merchant additions remain strong. Financial services, under BNPL, will remain under pressure, but the segment is showing signs of recovery.
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Dolat Capital Report
One Mobikwik Systems Ltd. reported revenue of Rs 2,714 million, a mild growth of 1.3% QoQ (our estimate:14.5%), due to soft payment services revenue performance (+0.7 QoQ) as gross merchandise value growth (+16% QoQ / 53% YoY basis) was offset by lower take rate (56 bps down 8bps QoQ).
Financial services revenue showed signs of recovery, growing 3.7% QoQ.
Management projects continued strength in its Payments segment, as user base and engagement enhanced, adding 3.8 million users/49,000 merchants during Q1.
While for financial services, the previous quarter likely marked the bottom (exited Zip business), with recovery underway and a potential upside in revenue and profitability.
The payment business continues to perform well, while financial services show early signs of recovery; but following the Q1 miss, we sharply cut our FY26/FY27E EPS estimates by 15%/18% and lower revenue estimates by 9%/7%.
We retain our ‘Buy’ with a reduced target price of Rs 400 (implies enterprise value/sales of ~1.6x or EV/Ebitda of ~65 times on FY27E estimate).
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