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MPS LtdQ3 FY24

MPS Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹2,608P/E: 24.4Market Cap: ₹4.5K CrSector: Printing & Publication

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

Yes

Order

N/A

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3
  • AJE's revenue is expected to start the new financial year in the early teens of margin and exit in the late 20s to early 30s EBITDA margin range, reflecting significant margin expansion (Page 12).
  • Revenue for AJE in FY'25 is expected between INR 200 crores to INR 250 crores, with growth driven by expanded market reach beyond Springer Nature's ecosystem and entry into new geographies like India and Central/South America (Pages 9-11).
  • The acquisition opens the B2C market to MPS, broadening reach and enabling cross-selling opportunities between AJE's B2C services and MPS's B2B customers (Page 4).
  • AI-driven tools like the proprietary SaaS platform "Curie" are expected to drive substantial growth in author services, with higher growth rates anticipated compared to traditional B2B markets (Pages 6-9).
  • MPS targets internal growth and at least one more acquisition within 6-8 months to further accelerate scale and revenue growth (Page 13).

See what MPS Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes
  • MPS Limited plans to fund acquisitions through a combination of internal accruals and debt.
  • They are comfortable raising debt up to the forward financial years' Profit After Tax (PAT) if needed.
  • There is no current mention of an equity fundraise as part of the funding strategy.
  • The company feels confident about funding the next acquisition without undue reliance on equity.
  • Overall, the funding approach is balanced and focused on manageable debt along with internal resources.

See what MPS Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes
  • No explicit mention of specific current or future capex amounts during the call.
  • Strategic investments focus on integrating AI capabilities, especially combining AJE’s AI team with MPS Labs.
  • Continued investment in AI-driven tools like “Curie” to enhance product offerings and internal efficiencies.
  • Investment plans include scaling up management depth and integration of acquired businesses into the overall portfolio.
  • Expansion into new geographies (India, Central & South America) is part of growth strategy, implying future strategic investments.
  • Focus on growing a portfolio of acquisitions (minimum $20 million revenue targets), indicating ongoing capital deployment.
  • Funding for acquisitions expected through a combination of internal accruals and debt corresponding to future PAT.
  • Overall, a strategic emphasis on technology, AI, and global expansion drives capital allocation, though exact capex figures are not disclosed.

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Margin guidance

Category 1
  • AJE’s profitability is targeted within 12 months, aiming to start the new financial year in the early teens of EBITDA margin and exit in the late 20s or early 30s percentage range.
  • Operating leverage will further expand margins as revenues grow.
  • MPS expects the acquired AJE entity to contribute Rs. 200-250 crores in revenue in FY'25 with improved operating margins moving towards company averages.
  • Management is optimistic about FY'25 performance but will provide specific guidance later.
  • Payback period for the acquisition investment is targeted at 3 years, with expectations of higher than current company ROCE (>30%).
  • Continued investment in AI and strategic synergies between AJE and MPS platforms expected to drive higher growth and efficiencies, supporting earnings expansion.
  • MPS plans further acquisitions to scale and grow revenues and profits.

Order book

The transcript does not explicitly mention details regarding the current or expected order book or pending orders for MPS Limited or its acquisition of AJE. However, related operational and strategic insights include: - The business is scaling with a focus on increasing management depth and ownership culture. - The acquisition of AJE is expected to add revenue in the range of INR 200-250 crores in FY'25. - Plans for at least one more acquisition in FY'25, targeting companies with minimum $20 million revenue. - Integration and synergy activities are ongoing, with a focus on cross-selling between MPS and AJE customers. - Growing focus on AI-driven tools and platforms (like “Curie”) to accelerate growth and enhance product offerings. - Revenue growth targets are optimistic for FY'25 with increasing profitability expected post-acquisition integration. No explicit order book or pending orders data is provided in the transcript.

How does MPS Ltd rank vs peers in Printing & Publication?

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