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Dolat Capital Report
Oracle Financial Services Software Ltd. reported rev. growth of 11.7% YoY in Indian rupee terms at Rs 16.4 billion (our estimate at Rs 17 billion, 17.3% growth).
Revenue miss was led by sharp fall in Implementation revenue (down 9.5% QoQ). Operating profit margin stood at 43.6% (our estimate: 43.3%), up 64 bps YoY driven by operating leverage and operational efficiencies.
License signings for Q4 stood at $19.9 million down 31% YoY, taking total signings for the year at $137 million which was up 43.6%. Headcount witnessed a continued decline, down 2% QoQ, taking the count at 8,700, impacting implementation revenues for the quarter.
We believe that healthy signings for FY24 would ensure double-digit growth in FY25E revenues and any further large deal wins would add more comfort on visibility.
Maintain ‘Accumulate' rating on the stock with discounted cash flow based target price of Rs 7,900 (implies ~25 times FY25E price-to-earning ratio).
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