This is a follow up to my previous posts – http://biginvestorblog.com/?s=MPS
MPS has been growing from strength to strength for the last 2 years. I got in on the stock at about 115 a share and the company has not disappointed since then. The company aside, I’ve really begun to admire Nishith Arora. He states his plan and achieves it, and keeps you informed along the way. I also got to watch him closely during the recent AGM in Chennai, and despite the stupidest, longest and most insane questions about the company posed by some marginal investors, i never once saw him loose his cool or disregard any question. Fantastic quality.
Anyway, letting my admiration to rest and getting back to the company. Here are the Q1 results
|
Q12013Standalone |
Q1 2014 Standalone |
Q1 2014 Subsidiary |
Q1 2014 Consolidated |
|
|
Sales |
39.79 |
45.22 |
4.97 |
50.19 |
|
Expenditure |
33.12 |
29.18 |
3.06 |
32.24 |
|
Operating Profit |
6.67 |
16.04 |
1.91 |
17.95 |
|
Operating Percentage |
16.7% |
35% |
38.4% |
35% |
|
Other Income |
1.66 |
1.14 |
0 |
1.14 |
|
PBIT |
8.33 |
17.18 |
1.91 |
19.09 |
|
Interest |
0.14 |
0.02 |
0 |
0.02 |
|
Exceptional Items |
0 |
7.72 |
0 |
7.72 |
|
PBT |
8.19 |
24.88 |
1.91 |
26.79 |
|
Taxes |
2.79 |
8.61 |
0.73 |
9.34 |
|
Tax % |
34% |
34% |
0 |
34% |
|
PAT |
5.40 |
16.27 |
1.18 |
17.45 |
|
EPS |
3.21 |
9.67 |
0.7 |
10.37 |
|
No of Shares in Cr |
1.68 |
1.68 |
1.68 |
1.68 |
|
Promoter Holding |
75% |
75% |
75% |
75% |
|
Adjusted Figures |
||||
|
PBT |
0 |
17.16 |
19.07 |
|
|
PAT |
5.40 |
11.15 |
12.39 |
|
|
EPS |
3.21 |
6.63 |
0.74 |
7.37 |
Key take aways from the Con Call yesterday.
- The current operational margins of 35% are sustainable. They industry has seen companies with margins from 20% unto 50%. That being said, since the company has not yet exhausted its capacity, it will continue to play the volume/ growth game and choose in terms of reduced margins as long as the net earnings are higher and to get a foot in the door for end to end client servicing.
- MPS does not supply all its services to all its clines and wants to be in that position soon making it a one-stop-shop for at least few of its vendors.
- Price – Volume – Productivity and Technology continue to be its key growth levers.
- Vendor consolidation is still on in the industry and MPS has continually been on the right side of this consolidation.
- MPS is one of the top three vendors in its business. Whether India or the world was not clear.
All in all nothing has changed spectacularly and things all seem to be heading in the right direction.Also , MPS has been clear that it is not stuck up to making acquisitions on an all-cash basis and will explore the possible funding opportunities as and when a suitable company comes up. Until then enjoy the rich dividends that the company is paying.