Midcap Services Sector Stock Soon To Trade Ex-Dividend, "Buy" For 42% Upside, Says HDFC Securities

Route Mobile Ltd on January 26, 2023, declared the Second Interim Dividend for the Financial year ending March 31, 2023. Leading brokerage firm HDFC Securities is bullish on the stock of Route Mobile, maintains "Buy" the stock with a target price of Rs 1,700 apiece implying 42% upside from its current level. Route Mobile is a service sector mid cap stock. It is among the leading Cloud Communications Platform service provider offering Communication Platform as a Service (CPaaS) solutions. It has a market capitalisation of Rs 7,487.04 crore.

Route Mobile Ltd Stock Performance

The share price of Route Mobile last traded at Rs 1,201.55 apiece on NSE, down 0.80% from its previous close of Rs 1,211.20 apiece. The stock's 52-week high was recorded on 1 February 2022 at Rs 1,888.90 apiece and the 52-week low on 23 June 2022 at Rs 1,052 apiece, respectively. 
 
Since its listing on 21 September 2020, the stock gained 84.48%. However, it has fallen 3.64% in the past1 week. In the past 1 month, it declined 1.22% and in 3 months it declined 10.11%, respectively. In the past 6 months, it declined 19.41%. In the past 1 year, it declined 34.55%. 
 

Route Mobile Ltd Declared 2nd Interim Dividend

According to the Board Of Directors of Route Mobile in its Regulatory Filing to BSE on 26th January 2023, "Pursuant to the Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 ("Listing Regulations"), we hereby inform you that the Board of Directors of Route Mobile Limited ('Company') at its meeting held today i.e. January 26, 2023 have declared the Second Interim Dividend of Rs. 6/- per equity share of Rs. 10/- each of the Company for the F.Y 2022-23."

It added, "The Interim Dividend approved by the Board of Directors at its meeting held on Thursday, January 26, 2023, will be paid to the Members on or before Wednesday, February 22, 2023."

HDFC Securities recommended buy the stock

According to the brokerage, Route's growth will be supported by (1) continued growth in messaging volume; (2) global expansion with several MNO tie-ups (A2P and firewall); (3) traction in new growth areas like OTT and RCS; and (4) up-selling and client mining. Over FY22-25E, we project revenue/EBITDA/EPS CAGRs of +36/43/29%. We initiate coverage on Route with a BUY rating and TP of INR 1,700, valuing it at 25x Dec-24E EPS, supported by its top quartile growth profile, RoE of ~20%, strong cash generation, and net cash of INR 10.4bn (~14% of market cap).

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.