MPS announced the results for the quarter ended March 2014 and recently held a conference call to discuss the results and future growth strategies. The key takeaways of the call are as follows.
Highlights of the call:
The Net Sales grew by 16% YoY to Rs 46.74 crore for the quarter ended March 2014 and PAT grew by sharp 58% YoY to Rs 11.65 crore for the same period.
The growth in Sales was driven by the strong growth in Journals (24.6%), Books (21.8%), and MPST (24.7%) during the quarter.
The EBITDA grows by 58.5% YoY; Margin up from 28.2% to 38.4% during the quarter.
The Staff cost as a percentage of revenue at 41.2% in Q4 FY'14 as compared to 44.5% in Q4 FY'13. Also, other expenditure declined by 19% YoY due to shifting of Gurgaon facility to low cost location and consolidation of Chennai facility from two to one along with other general administrative cost reduction policies.
The MPS derives majority of its revenue from North America (50% in FY'14) and Europe (47% in FY'14). Notably, the Revenues from North America up 14.0% YoY and European market up 17.6% YoY during the year.
The Digicode platform sales are 10% of the technology group. It expects to improve gradually going forward.
The revenue share of top 10 clients aggregated 75% and top 5 clients aggregated 57% in FY'14.
The Total number of clients is at 70 as on 31st March'14 as compared to 60 on 31st March'13. It added few clients through the acquisitions.
The ramp up time from a client to realize the potential is 1-1.5 years time.
In general, The December quarter has seasonal upside from books division and journal division.
It continues to work on organic and inorganic growth and is looking for both the opportunities in the publishing landscape.
The Global publishing market opportunity is USD 450 billion and work outsourced to India is USD 1.5 billion, further the outsourcing play is to increase going forward.
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