“ The last few years performance was attractive, but what we could deliver may truly be exciting.”
Welcome to MPS 2.0
When technology disrupts an industry there is major chaos, and where there is large spread chaos, there is opportunity. More than anything else, it matter which side of the disruption you are on. MPS is on the side of the disruptors.
The publishing industry is losing its teeth and its bargaining power by the functions that it used to control. At the same time, it can actually become way more effective in its core job of content creation and management. While a whole bunch of publishers have been raising arms and simply complain the big ones have moved fast and are making use of this opportunity.
The online market has increased the reach of the publishers to impossible levels. New emerging markets which were never even on their distribution maps have suddenly become customers that generate revenue from the 1st order. Publishers can therefore stick to better quality and not indulge in populist measures just for the fear of a loss.
I might be jumping the gun here by quite a bit, but i think MPS is to the Publishing Industry what Amazon web services is to Online Retail.
60% of Harper Collins Fiction sales are on e-books today. How far away do you think the professional books are ? http://www.harpercollins.com/#
MPS has continually focused on mining its top 10 publishers and today over 81% of their turnover comes from them.
Look up their annual report and you will see the future publishes sitting pretty in their client list – Apple and Amazon. Apple has just revolutionised the music industry yet again and amazon is the pioneer of online book retail. I down Wiley can even dream of competing with them in areas other than content creation and management.
This looks like the mantra today.
- lower NUMBER OF VENDORS
- higher VOLUME per vendor
- lower MARGINS
- higher SERVICES INTEGRATION
- higher TECHNOLOGY
New Publisher Focus is 3 pronged
- Technology enablement
When Nishith Arora tok over the company in 2012, the company was bleeding despite its goodwill and fat order books. He took less than 3 years to
- bring down cost to levels where even kaizen seems impossible
- concentrated focus on the biggest to become their key vendors
- sacked people, shut offices and made MPS a lean mean machine.
- and of course got on to the right side of the disruption
With its recent acquisitions he has now left Rahul in charge of the day to day operations and client mining while he moves towards more exciting and hopefully profitable areas of acquisitions. I dont believe he has ever said this out loud and he keeps saying that he is looking for companies with order book in this space, but i think he is secretly looking for acquisitions in the content creation space. It is pure value migration. This is still speculation, but i think this comment of mine has great probability.
Letting aside the forex gain and the depreciation write back and the other income MPS generated and Operational PAT of 49.25 cr last year. With a M.Cap of 1,640 cr and hard assets and cash of over 180 cr the MCap is 1,460 cr or about 29x the yearnings of 2014-15.
With the 3 acquisitions beginning to contribute, and the new Cash bags of 150 cr, the company is set to enter into a new dimension.
i’ve just bought my popcorn to enjoy the show.
in elite company. Ignore DLF obviously.