OnMobile Global Services has delivered numbers that were ahead of expectations for the September quarter. This was driven largely by increasing traction in its international business.
During the quarter, while revenues increased 13.8 per cent sequentially to Rs 155.2 crore, net profit more than tripled to Rs 47.7 crore, due to heavy inflows on account of stake sale in VerSe Innovation.
However, even at the EBITDA level, performance was impressive with profits improving 20.4 percent to Rs 32.5 crore.
The key takeaway from the quarter is that international revenues continue to grow at a scorching pace with 50.5 percent sequential growth achieved. The company has multi-year rollout deals with players such as Telefonica (Latin America) and Vodafone (Africa), and its substantial investments in these geographies, especially the former, over the past year appear to be paying off.
International revenues now account for over 42 per cent of overall revenues. OnMobile looks well set to achieve its target of deriving half its revenues from international operations.
However, there are also a couple of points of concern for the company. First, OnMobile's domestic revenues have declined steadily with this quarter witnessing a 3.6 percent dip. Despite tariff wars subsiding considerably among mobile operators in India, ARPUs have continued to decline and there has been limited off-take of value-added services. The company expects domestic revenues to remain subdued for the next few quarters. Even the launch of 3G services hasn't seen vigorous response from mobile subscribers.
Second, with overseas revenues driving growth, the company is likely to have an increased cost structure going forward.