revenue (our estm: 31.9% QoQ) largely led by inorganic contribution from acquired Highwire business while organic business biz segments remained in flat to slightly negative growth range. OPM declined 360bps QoQ to 17.0% (our estm: 15.0%) due to decline in margins of all 3 biz segments where-in Platform business was impacted by lower EBITDA margin of acquired Highwire Biz (early double digit). MPS expects Highwire business to deliver improved profitability (40-45% EBITDA margins) by end of FY22 led by cost take-outs (IT, Rent, Other...

Weak Results; Large Deal Wins in Content biz to drive recovery MPS reported weak Q4FY20 results, with a 9.0% QoQ and 15.6% YoY decline in revenue (our estm: 1.3% QoQ growth), largely led by QoQ decline of 15% and 19% in Platform and E-Learning business. OPM contraction of about 480bps QoQ to 12.7%, (our estm: 19.8%) primarily due to sharp absolute revenue fall off directly impacting EBIT. Content solutions revenues fell 3.0% YoY in Q4 but expects positive momentum hereon as it has started rampup of a large deal won in the...

Although the company's revenues have grown at 12.1% CAGR in FY16-19, we believe majority of growth is from acquisition. We believe the organic growth has been below 5% in FY16-19 mainly due to the subdued performance of the content solution business. The content solution business (accounts for 64% of total topline) has declined at 3.2% CAGR in FY17-19. In addition, the market in which MPS operates is fragmented and publishing outsourcing vendors are not price settlers but are compensated by volumes, which also keep revenue growth under check. Further, higher client...

We believe FY20/FY21E would be the key year for EBIT/Organic growth revival for the business. In our view, although the transition period is long, but as it endures through this the growth profile of the business should improve significantly led by strong evolving enterprise learning business. Given strong management track record on turnarounds and attractive valuations, we maintain our Buy rating on the stock with a TP of Rs740 per...

TIS is a wholly owned subsidiary of Tata Industries and has three decade expertise in the corporate learning business with revenues of about Rs1.4bn (FY17) with elite clientele (70 Fortune 500 companies) spread across Europe and India. traction for FY19 and FY20 significantly. Post-acquisition MPS would emerge as strong challenger in the fast-growing enterprise learning outsourcing business. We have upgraded our Revenue/earnings estimates post this event and now expect MPS to deliver 33%/19% CAGR over FY18-20e respectively. We upgrade our Rating on the stock to BUY with TP of Rs840 per share (valued at 15x FY20e earnings)....

rethink, as MPS is exiting several non-profitable deals in the acquired Mag+ business. We believe that once MPS resolves the aforementioned issues, it would be in a position to deliver strong double-digit organic growth in FY19E, which along with its efficient cost management would drive OPM gains. We maintain our ACCUMULATE rating with a TP of Rs680 (valued at 14.5x on FY20E earnings. Operating performance tad lower than estimates on marginal revenue miss MPS' Dec'17 quarter performance was a tad lower than our estimate on account of lowerthan-expected revenue while the OPM was in line with our expectation. The Platform Solutions business continued to register healthy double-digit growth (up 18% yoy; in line with...

Moderate Topline Growth; Margins Impacted Due to Stronger Rupee: MPS Ltd (MPSL) consolidated revenue impacted due to the stronger rupeeduring the quarter witnessing a YoY growth of 8.1% compared to revenue growth of 18.0% in the constant currency terms. In reported revenue terms, it registered Rs.669 Mn in Q1FY18 compared to Rs.619 Mn in Q1FY17.

Moderate Topline Growth, Margins Impacted Due to Stronger Rupee:MPS Ltd (MPSL) consolidated revenue impacted due to the stronger rupee during the quarter witnessing a YoY growth of 8.1% compared to revenue growth of 18.0% in the constant currency terms. In reported revenue terms, it registered Rs.669 Mnin Q1FY18 compared to Rs.619 Mn in Q1FY17. The Content solution segment, highest contributor, degrew by -7.2% during the quarter to Rs. 523 Mn compared to Rs. 563 Mn in Q1FY17.

Decent Topline Growth, Mag Plus Operational Cost & Stronger Rupee Continue to Weigh on Margins: MPS Ltd (MPSL) consolidated revenue got impacted due to the strong rupee during the quarter witnessing a growth of 9.9% compared to revenue growth of 15.0% in the constant currency terms. In reported revenues terms, it cloaked Rs.716 Mn in Q4FY17 compared to Rs.652 Mn in Q4FY16. The Mag Plus acquisition continued to increase the geographical contribution from the North America at 60% andhelped the company to mitigate the high client concentration risk.

Turnaround of recent acquisition (Mag Plus) under process, EBITDA Margins continue to be dragged with moderate revenue growth: consolidated revenue grew at 16.0% during the quarter to Rs.800 Mn in Q3FY17 from Rs.690 Mn in Q3FY16 mainly due to the growth in dollar revenue. The contribution from the North America increased mainly on account of the Mag Plus acquisition and the US based customer contribution. Top 5 & 10 contributions composition has changed mainly on account of the increased in the clients numbersdue to the Mag Plus acquisition.

BUY MPS Ltd at CMP Rs. 703 and add on Dips to Rs. 610 - 665 for the target of Rs. 830 - 950

Incremental Business Coupled with Inorganic Approach Continues to Drive Revenues: Consolidated revenues increased by 11.4% in H1FY17 mainly on accountof the Mag+ acquisition during the first half. The revenues for H1FY17 stood at Rs.1371 Mn compared to Rs.1231 Mn in H1FY16. EBITDA Margin decreasedin H1FY17 to 33.2% a drop of 222 basis points compared to H1FY16 at 35.4%. EBITDA for half year stood at Rs.455 Mn compared to Rs.436 Mn in H1FY16.

Declining print sales in major markets and gaining digital publishing;favourable condition for the company: Changing consumer preference towards the digital book format leading to declining print, we believe that the company stands in sweet spot to take advantage increasing flow of the global publishers outsourcing work to India and we expect the company to grow at 7.8%CAGR on standalone basis drung FY15-17E.