Telecommunication Stock Okays 3rd Interim Dividend of Rs 3/Share For FY24: Buy?

With a market valuation of more than Rs 9,900 Cr, Route Mobile Ltd. is a mid-cap company in the telecom industry. The stock saw a rise of 1.47% when it began trading on the BSE today at Rs. 1570.15 a share and surged to an intraday high of Rs. 1586.45 during the morning sessions. Let's find out if market observers might consider purchasing the stock after the company announced its Q3 results and an interim dividend of Rs 3 per share for FY24.

Route Mobile Dividend

The Board of Directors have declared a third interim dividend of Rs. 3/- per equity share of Rs. 10/- each of the company for the F.Y. 2023-24. February 1, 2024 has been fixed as the record date for the purpose of ascertaining the eligibility of the shareholders for payment of the third interim dividend, according to the company. "The Interim Dividend approved by the Board of Directors at its meeting held on Tuesday, January 23, 2024, will be paid to the Members on or before February 20, 2024," said Route Mobile in a regulatory filing.

"Pursuant to Finance Act, 2020, dividend income will be taxable in the hands of the shareholders with effect from April 1, 2020. Hence, the interim dividend declared by Board of Directors shall be paid after deducting tax at source ('TDS') in accordance with the provisions of the Income Tax Act, 1961. Members are requested to submit all requisite documents on or before February 1, 2024, to enable the Company to determine the appropriate TDS rates, as applicable. A separate communication in this regard will be sent to the shareholders in due course," said Route Mobile in a stock exchange filing.

Route Mobile Financials

The company's revenue from operations on a consolidated basis stood at Rs. 1,024.3 crore in Q3FY24 as against Rs. 985.7 crore in Q3FY23. The reported Profit After Tax (PAT) was Rs. 113.6 crore, up from Rs. 85.4 crore in Q3FY23. PAT in Q3 FY24 was boosted by Exceptional Items amounting to Rs. 15.0 crore, representing the fair value gain, as on December 31, 2023, of the contingent consideration payable towards the acquisition of 100% equity stake in M.R Messaging FZE, according to Route Mobile.

Mr. Rajdipkumar Gupta, Managing Director & Group Chief Executive Officer, Route Mobile Limited, said, "I am delighted to share that we have registered our best quarterly revenues during the quarter gone by. It was a slightly muted performance, considering Q3 is historically our best quarter. This is due to the industry headwinds and delays in a couple of our large contracts going live. We have recently onboarded some large customers in Asia and Europe and they should gradually ramp up". He also said, "We are encouraged by the growing adoption of channels like WhatsApp and RCS, some of our latest contract wins are equivalent to the monthly revenues of these product lines. The evolving messaging landscape is creating exciting opportunities for us to welcome numerous new clients to our omnichannel platform."

Commenting on Proximus deal, he added, "We have secured the most important US approval and are in striking distance of the deal closure. A couple of regulatory approvals from the Middle East are awaited anytime soon".

Route Mobile Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said ROUTE is currently making waves in the market, trading at Rs 1570 and showcasing resilience through a minor pullback and sideways consolidation. The stock has successfully established a support level at the 20-day Exponential Moving Average (EMA), indicating a promising potential for further upward movement with an ambitious target set at Rs 1800. Notably, ROUTE maintains its position above crucial Exponential Moving Averages, including the 20-day, 50-day, and 100-day EMAs, reflecting a robust bullish momentum that strengthens the expectation of continuous upward price action.

For savvy investors looking to navigate the market, a substantial support zone near Rs 1430 on the downside provides confidence in ROUTE's stability. To manage potential risks, implementing a strategic stop-loss at Rs 1430 is advised, safeguarding investments and ensuring a prudent approach to market fluctuations. Furthermore, astute investors are encouraged to actively explore buying opportunities during market dips, aligning with ROUTE's growth trajectory.

Analysing the technical indicators and current market conditions, ROUTE emerges as a compelling buying opportunity. With a target price of Rs 1800, contingent upon the execution of sound risk management strategies, this stock proves attractive for investors seeking potential gains in the present market environment. The observed support levels, combined with the bullish momentum, present a positive narrative for ROUTE in the dynamic landscape of technical analysis.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.