Friday, July 8, 2016

8k Miles Software Announces Strong Q1 Results

Listed mid-cap IT firm, 8K Miles Software Services has announced its Q1 results today.

Revenue has come in at Rs. 103.89 crores, which is up by 105% year-on-year.

EBITDA has been recorded at Rs. 36.78 crores, up by 132% YoY, indicating margin improvement.

Net Profit after accounting for minority interest has come in at Rs. 19.33 crore YoY, which is a 168% growth.

On a quarter-on-quarter (QoQ) basis, revenue, EBITDA, and net profit after minority interest has recorded 20%, 40%, & 57% growth respectively.

The surprisingly strong growth at 8k Miles is being powered by a string of unique acquisitions in USA.

The cloud services player's stock has surged nearly 145 times from Rs. 18 in late 2012 to Rs. 2550 in late FY'16, stunning most market observers.

The market cap expansion was justifiably on fundamental growth, when 8k Miles' earnings soared by more than 11 times during these past 4 years.

Still, the balance sheet remains small, and the base effect on the revenue side is still favourable for the Chennai based company whose operations are mainly in USA.

The company also scores high in Respect for Equity, Profit Margin, and Return for Equity, among other metrics.

However, 8k Miles is yet to provide dividends to investors, and the valuations are also steep for value investors to feel comfortable at this stage.

There is a concern that the growth may be slowing down, especially on a QoQ basis, but so far the company has been taking the right steps in USA for furthering its early mover advantage in cloud services.

It has done a string of acquisitions overseas, and has also roped in an impressive panel of strategic advisors in its core market, which is surprising for its size.

During FY'16, revenue has soared by 118% while net profit has surged by almost 109%.

Post announcement of Q1 FY'17 results today, 8k Miles software Services' stock was trading at Rs. 1900, up 6.96%.

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