MPS Q4 Results Review - Revenue Miss; However Improved Efficiencies, Right Mix Led To OPM Beat: Dolat Capital

Dolat Capital Report

MPS Ltd. reported revenue decline of 3.5% (our estimate: +3.3%) largely led by slowdown in eLearning division (-13% QoQ) seasonality impact, while content and platform division reported flat growth QoQ.

MPS is confident on sustained growth performance over the next five years due to accelerated growth across all divisions (guidance implied organic growth of 12.5% compound annual growth rate) led by robust demand. 

Operating margins expanded by 469 basis points QoQ at 32.1% led by lower operating expenditure (down 10% QoQ).

Expansion majorly led by platform biz., operating profit margin up by 1,124 bps at 41.2% (highest ever) as it saw revival across geographies.

Management expects sustained profitability from operating leverage.  Strong Q4, positive outlook for the next five years and focus on acquiring growth business raises our confidence in biz.

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