Oracle Financial Services Q4 Review - Results Miss, Healthy Licence Wins Restore Confidence: Dolat Capital

Dolat Capital Report

Oracle Financial Services Software Ltd. reported revenue growth of 15% YoY in Indian rupee terms at Rs 14.7 billion (our estimate: at Rs 15.7 billion).

Revenue miss was on account of slower bookings of implementation revenues during the quarter (flat QoQ at Rs 6.6 billion). Licence signings for the quarter stood at $28.8 million (up 5% QoQ, down 2% YoY).

Operating profit margin stood at 43% for the quarter (our estimate: 44%) up 243 basis points QoQ but the recovery was slower than expectation given sustained investments in talent costs and increased sales and marketing cost due to opening up factor.

Despite the miss in Q4 performance we believe Oracle Financial Services' delivery continues to trend on improved track as evident from strong hiring in FY23 (9% YoY), healthy licence revenue up 5% YoY at $96 million. 

The current run rate suggest possibility of high single digit growth in FY24E revenues and gradual recovery in profitability over coming quarters.

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