Epuja Spiritech LtdQ3 FY23Finance

Epuja Spiritech Ltd

Q3 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Astrology segment expected to contribute 30-35% of total revenue in next 2-3 quarters (Page 20).
→Repeat customer ratio is high at 50%, with 50% clients ordering yearly or quarterly, aiding revenue stability (Page 21).
→Plans to expand temple network beyond current 3,600 temples towards 5,000+ to boost order flow (Pages 6-7, 19).
→Marketing spend projected to increase 3-4 times, targeting 30-35% of revenue, enhancing customer acquisition and growth (Page 19).
→Revival of religious tourism tie-ups like with MakeMyTrip aims to increase volume and revenue via VIP temple guided tours launching by end of Q4 FY24 (Pages 9, 11).
→Launch of ePuja store planned by Q1 FY25 selling puja items, providing cross-selling opportunities (Page 14).
→Large corporate tie-ups in progress to scale volume through bundled pujas (Page 14).
→Overall, business aims to leverage cross-selling, expanded offerings, and deeper temple network to grow sales and volumes steadily.

Margin guidance

Category 3

- Astronomy segment expected to contribute 30-35% of total revenue within next 2-3 quarters, up from a minimal base currently (page 20). - Astrology anticipated to drive cross-selling and upselling for ePuja segment, potentially boosting revenue streams (page 20). - Marketing expenses planned to increase 3-4 times phased to fuel growth, aiming to raise marketing spend to 30-35% of revenue from current 10-12% (page 19). - Expansion into new verticals like temple tourism, astrology services, and ePuja product sales expected to contribute to top-line growth (pages 14-20). - Network expansion of temples from 3,600 to targeted 5,000+ temples foreseen to increase order volume (page 19). - Strategic tie-ups (e.g., corporate & broker partnerships) forecast to scale volumes and customer acquisition, thereby improving profitability (page 14). - Repeat customer ratio at 50% supports high customer lifetime value, lowering acquisition costs and enhancing margins (page 20-21). Overall, growth driven by diversification, network expansion, and increased marketing spend is expected to improve earnings and profitability in the near term.

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Fundraise plans

Yes

→The company has recently announced a fundraise through preferential allotment (equity).
→The raised funds are planned for deployment in expanding the temple network, upgrading technology (website and mobile apps), marketing, increasing manpower, and potential small acquisitions in the digital marketing space.
→There is no explicit mention of any new or upcoming fundraising through debt.
→Focus is on deploying current raised equity funds for growth and scaling operations rather than seeking fresh debt or equity immediately.

Order book

Yes

→Currently, the company performs approximately 40 to 50 pujas daily.
→During the COVID lockdown, the run rate was higher, close to 9,500 pujas, indicating a temporary spike.
→In the recent quarter, about 4,000 pujas were booked, showing growth compared to the previous quarter's approximately 3,400 pujas.
→Orders come both from within India (75%) and internationally (25%), with major markets abroad including the US, UK, Canada, Australia, Singapore, and UAE.
→Around 50% of clients are repeat customers, who place orders yearly or quarterly depending on the festival or need, contributing to a steady flow of orders.
→The company is working on expanding the temple network, which should increase capacity and order volume.
→Corporate tie-ups and collaborations (e.g., with brokers, travel websites) are expected to contribute to order growth going forward.

Capex plans

Yes

→The company plans several capital deployments as part of their growth strategy:
→ - Expanding the temple network to 5,000 temples.
→ - Upgrading technology including website and developing Android and iOS applications.
→ - Creating content and increasing marketing efforts, especially through social media.
→ - Increasing manpower to support growth.
→ - Pursuing meaningful small acquisitions in the digital marketing space.
→ - Creating an omnichannel presence with plans to set up kiosks at major airports across India.
→Additionally, they plan to relaunch an ePuja store (by Q1 of next financial year) selling Puja articles like Rudraksha, gemstones, Yantras, incense sticks, etc.
→Marketing spend is expected to increase 3 to 4 times from current levels, targeting 30-35% of revenue.
→Future launch plans include a "Pandit at Home" service with thorough background checks, aiming for Q2 of the next financial year.

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