Onmobile Global is an MVAS(mobile value addedd services) company based in Bangalore. Renowned for its hugely successful RBT(ring back tones); the company now offers 5 product categories; Music, Expression, Entertainment, Cloud and Life impacting services. For more info check, http://www.onmobile.com/
Mobile VAS is broadly defined as all those products and services offered by a cellular/mobile operator other than voice(ability to speak) and SMS(ability to text). VAS includes ring tones, music, gaming, entertainment, mobile browsing, and further extends to m-commerce, m-education and a gamut of areas.
PRESENT DAY NUMBERS
CMP on Day16 Feb2014: Rs 32 Market cap: 366 crores BV: 79 FV: 10
Debt: 130 cr Net worth: 722 cr (excl goodwill) Cash on books: 212 cr
BRIEF HISTORY
The company was originally incubated within Infosys, later spun off, and incorporated in California in the year 2000. Acquired Voxmobili, a French data products company in 2007. First indian mobile VAS company to go public in the price band of 425 - 450. Listed in Feb 2008; opens at issue price of 440. Acquired Telisma S.A., a French speech recognition company in 2008. Acquired the leading 3G video technology and mobile solutions developed by Silicon valley based Dilithium networks Inc in 2010. Acquired Livewire Mobile; a music, ringtone and infotainment company in 2013; thereby expanding its services to leading operators in North America.
MULTIBAGGER POTENTIAL
Potential of MVAS:
There are numerous reports about the potential of MVAS in India and across geographies. Some also mention business potential. Most of these numbers are humongous. I have deliberately not included data from those reports. How ever, voice and SMS are just parts of the mobile telephony business. We have all witnessed how majestic the growth has been in that space. As MVAS includes a much wider gamut of products and services, one only needs to wait and watch as to how large this opportunity could become.
Onmobile Global is well positioned to make the most of this opportunity. It has all the basics in place. After the recent turbulence, the company has emerged with a more robust foundation. So, has the potential to capitalize on this opportunity.
Revenue diversification over last 4 years:
Annual revenue, and mix in Q2 FY2010: 106 cr [India 79 cr, International 27 cr]
Revenue, and mix in Q2 FY2014: 225 cr [India 50 cr, Latam 55 cr, Dev mkts 80 cr, Emrg mkts 38]
(Except India, all geographies are growing since last 8 quarters.
International business share at 76% in Q2FY14)
Current global representation:
In the year 2009, the company had presence/offices in Australia, Bangladesh, France, Indonesia, Malaysia, Singapore, Nepal, South Africa and Romania.
In 2013, Onmobile has added the following countries: Netherlands, USA, Mexico, Argentina, Venezuela, Brasil, Egypt, Uruguay, Senegal, Mali, Kenya, Malawi, Costa Rica, Spain, Tanzania, Zambia, Uganda, Madagascar, Rwanda, Nigeria, Ghana, Sierra Leone, Canada, Italy, Spain, Cyprus, Guatemala, Chile, Panama, Nicaragua, El Salvador, Peru.
The increase in the international spread of geography during last 4 years, in conjunction with the increase in annual revenues, and change in the revenue mix speaks volumes about the future potential of this company.
IMPORTANT INFO
1. Sanjay Bhambri, the current Chief commercial officer, re-joined the company as Regional VP, Emerging markets. In his earlier stint with Onmobile, he was VP, APAC and MEA.
2. Onmobile has inducted 2 new independent directors into the board within the last 1 year. Both people with impecabble credentials who earlier held positions of repute in their respective countries. Mr R Chandrashekhar, who was Chairman, Telecom commission and Secretary, DoT. Ambassador (Ret.) Barry White, who was US ambassador to Norway.
MY TAKE
The last 3 years have been terrible for the company. Corporate governance issues, unfavorable regulations by the Indian telecom authority, declines in India revenue, dubious actions by ex-CEO, senior management resignations, telecom scams in India. Everything that could have gone wrong went wrong. The once poster-boy of indian mobile VAS became its whipping-boy. Share price collapsed from a high of 340 rs in July 2009 to a low of 19 rs in Aug 2013.
As the oracle of Omaha says,
"Buy when others are fearful, and Sell when others are greedy"
In the last 6 quarters, the company has systematically grown the business across multiple geographies; Latin America, Africa, North America, Europe (while holding their fort in India). They have further set right systems and processes, strengthened the corporate governance, brought back some of the erstwhile stars, strengthened their top management, organized their service offerings and pain stakingly brought the company back on rails.
With the foundation in place, fully energized by the revamp and re-organization, Onmobile Global is equipped and well placed to become a top global MVAS company. Further the recent corporate action, whereby the promoters have come up with an open offer at 40 rs, to increase their stake from 32% to 42% is a testimony of their confidence in the future prospects of the company.
A strong potential multibagger!!
Disclosure: I own shares in Onmobile Global (and intend to add more)
Mobile VAS is broadly defined as all those products and services offered by a cellular/mobile operator other than voice(ability to speak) and SMS(ability to text). VAS includes ring tones, music, gaming, entertainment, mobile browsing, and further extends to m-commerce, m-education and a gamut of areas.
PRESENT DAY NUMBERS
CMP on Day16 Feb2014: Rs 32 Market cap: 366 crores BV: 79 FV: 10
Debt: 130 cr Net worth: 722 cr (excl goodwill) Cash on books: 212 cr
BRIEF HISTORY
The company was originally incubated within Infosys, later spun off, and incorporated in California in the year 2000. Acquired Voxmobili, a French data products company in 2007. First indian mobile VAS company to go public in the price band of 425 - 450. Listed in Feb 2008; opens at issue price of 440. Acquired Telisma S.A., a French speech recognition company in 2008. Acquired the leading 3G video technology and mobile solutions developed by Silicon valley based Dilithium networks Inc in 2010. Acquired Livewire Mobile; a music, ringtone and infotainment company in 2013; thereby expanding its services to leading operators in North America.
MULTIBAGGER POTENTIAL
Potential of MVAS:
There are numerous reports about the potential of MVAS in India and across geographies. Some also mention business potential. Most of these numbers are humongous. I have deliberately not included data from those reports. How ever, voice and SMS are just parts of the mobile telephony business. We have all witnessed how majestic the growth has been in that space. As MVAS includes a much wider gamut of products and services, one only needs to wait and watch as to how large this opportunity could become.
Onmobile Global is well positioned to make the most of this opportunity. It has all the basics in place. After the recent turbulence, the company has emerged with a more robust foundation. So, has the potential to capitalize on this opportunity.
Revenue diversification over last 4 years:
Annual revenue, and mix in Q2 FY2010: 106 cr [India 79 cr, International 27 cr]
Revenue, and mix in Q2 FY2014: 225 cr [India 50 cr, Latam 55 cr, Dev mkts 80 cr, Emrg mkts 38]
(Except India, all geographies are growing since last 8 quarters.
International business share at 76% in Q2FY14)
Current global representation:
In the year 2009, the company had presence/offices in Australia, Bangladesh, France, Indonesia, Malaysia, Singapore, Nepal, South Africa and Romania.
In 2013, Onmobile has added the following countries: Netherlands, USA, Mexico, Argentina, Venezuela, Brasil, Egypt, Uruguay, Senegal, Mali, Kenya, Malawi, Costa Rica, Spain, Tanzania, Zambia, Uganda, Madagascar, Rwanda, Nigeria, Ghana, Sierra Leone, Canada, Italy, Spain, Cyprus, Guatemala, Chile, Panama, Nicaragua, El Salvador, Peru.
The increase in the international spread of geography during last 4 years, in conjunction with the increase in annual revenues, and change in the revenue mix speaks volumes about the future potential of this company.
IMPORTANT INFO
1. Sanjay Bhambri, the current Chief commercial officer, re-joined the company as Regional VP, Emerging markets. In his earlier stint with Onmobile, he was VP, APAC and MEA.
2. Onmobile has inducted 2 new independent directors into the board within the last 1 year. Both people with impecabble credentials who earlier held positions of repute in their respective countries. Mr R Chandrashekhar, who was Chairman, Telecom commission and Secretary, DoT. Ambassador (Ret.) Barry White, who was US ambassador to Norway.
MY TAKE
The last 3 years have been terrible for the company. Corporate governance issues, unfavorable regulations by the Indian telecom authority, declines in India revenue, dubious actions by ex-CEO, senior management resignations, telecom scams in India. Everything that could have gone wrong went wrong. The once poster-boy of indian mobile VAS became its whipping-boy. Share price collapsed from a high of 340 rs in July 2009 to a low of 19 rs in Aug 2013.
As the oracle of Omaha says,
"Buy when others are fearful, and Sell when others are greedy"
In the last 6 quarters, the company has systematically grown the business across multiple geographies; Latin America, Africa, North America, Europe (while holding their fort in India). They have further set right systems and processes, strengthened the corporate governance, brought back some of the erstwhile stars, strengthened their top management, organized their service offerings and pain stakingly brought the company back on rails.
With the foundation in place, fully energized by the revamp and re-organization, Onmobile Global is equipped and well placed to become a top global MVAS company. Further the recent corporate action, whereby the promoters have come up with an open offer at 40 rs, to increase their stake from 32% to 42% is a testimony of their confidence in the future prospects of the company.
A strong potential multibagger!!
Disclosure: I own shares in Onmobile Global (and intend to add more)
Dear Zorba,
ReplyDeleteDo you still suggest to buy Onmobile Global ?..
Not an easy answer, my friend.
DeleteLot of water has flown below the Onmobile bridge in the last 6 months.
A detailed analysis needs to be done.
Currently I hold no shares in Onmobile global.
How ever the stock is on my radar.
As there are much better opportunities, I have not taken a detailed look at this one.
Best Regards!!
I have been tracking this company for some time now. This company has good customers and healthy dollar revenue. The only issue was that this was not optimally managed. Now the management is with the investors, it is their money, they will ensure things go right. See the transcript of the last concall, Rajiv Pancholy has promised that the EBITDA will be better than 18%, they may also give a divident with the 180 crs cash in hand.
ReplyDeleteRadhika madame, Good to c ur msg.
DeleteOne year back I was super bullish on Onmobile. How ever now I am quite bearish (and with good reason)
Looks like u r very positive on this company; To be this looks like wishful thinking.
Few reasons to back my thought process:
1. Though on surface the company seems to be on a turn-around track, the reality does not suggest that.
2. In the last 4 years, at least 4 CFO's have quit the company (and that is a very bad signal)
3. The LiveWire acquisition does not seem to have worked.
4. Few quarters back, the company decided out-of-the-blue to give its Chairman (based in the US); a salary of few crores (if my memory serves me right, 4 crores) per year. Why?? What for??
5. There are too many grey areas with this company for my comfort.
In the future the stock price may go up or down. To me that is not the core aspect (in fact, that is a by product)
What is important to me is, If I buy this company can I sleep peaceful at night ? Is everything (at least most of the things) about this company in "white and black" (clearly i am not interested in companies where there are to many grey areas)
Best Regards!!
Hello Yogi
DeleteI completly agree with your view point, that is why the share price is at such low value.
However, my positivity comes from the recent changes in management which happened. Rajeev Pancholi, the current MD, is fom the majority investor side ( majority investor- a canadian family ). In the recent investor call he has promised that the company will come back to its historic EBITDA margins ( 18 to 20%, see the copy of the transcript in their website) . I am sure, he would not have said this statement without knowing the insides. So if he promises as per his comittment, in this quarter, I think , this will have a very positive impact on this share. Hoping for a good result this time.
Also, what i like about this business is that they work with stable and very large clients like Vodafone, Telefonica, Airtel, Tata, Telenor etc and their services reach remotest parts of the world in Africa and Latim America.
regards
Dear Radhika,
DeleteOnmobile has had a dramatic up move. Congrats!!
You must be sitting on a nice profit :-)
Still, I am of the view that this is a short term up move and will not sustain.
If I were in your shoes, I would try and time the peak (of this up move) and sell.
Make your own decision. Good luck!!
Hello Mr.Yogi
DeleteIndeed I made good money in this script. I have sold partial holding to cut my risk, the balance I want to take a long term bet.
Thanks for your sincere and prudent advice