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Top Stock to Buy with Anil Singhvi - In todays edition of Special Investment Portfolio or SIP Stock Zee Business Research Analyst Ashish Chaturvedi picked up OnMobile Global shares, saying that the company has a robust growth business, while the stock is available at an attractive valuation. In a chat with Zee Business Managing Editor Anil Singhvi, Chaturvedi said that the gaming business ONMO will be the growth factor for the company.
Talking about the companys profile in detail, he said that OnMobile Global, a mobile internet platform company, provides solutions to customers. The company has experience of 20 years in this. It has a wide reach of 370 crore in over 76 countries.
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Chaturvedi said that the stock is expected to do well as the company has been witnessing a big turnaround since Q3 FY21. The company has witnessed a surge of 30 per cent in its customer base. It now has added 143 new clients. The company has also taken a strategic shift, earlier it was a B2B company, but now the focus is on B2C business. For this, the company has launched a new platform called ONMO, he added. ONMO is a multiuser cloud gaming platform and this will be a growth factor for the company. In Q2 FY22, this will be a huge contributor to the revenue, he asserted.
He further added that till the time PUBG was banned in India, the virtual in-gaming merchandise made a growth of Rs 60 crore every month. If the companys even one game takes off then there is a scope for huge growth and rerating.
Sharing more details, Chaturvedi said that in Q1 FY21, the company had extraordinary results. The valuation is attractive. No other mobile gaming or internet-related business you will get in such a cheap valuation. The companys Price Book is 2.2X, market cap sales is 2.3X.
Comparing it with Nazara Technologies, he said Nazaras Price Book is 11X, Market Cap sales is 13X, compared to OnMobile Globals Price Book 2.2X and Market Cap sales 2.3X. The company doesnt have any debt and has surplus cash of Rs 274 crore. Cash per share is Rs 26. High growth business in cheap valuation!
Talking about the companys prospects, Zee Business Managing Editor said that the future of the company looks very promising and this is the reason why he has chosen it as a SIP stock today. Keep this stock on the radar not just for today but for 2-3 quarters and keep an eye on the developments, he advised.
Till now the value-added services the company provides to mobile operators and customers are the same he said. But the interesting thing here is the gaming business, he added saying that the concept is quite interesting.
If you are playing a game and stuck somewhere in the middle, then you dont have to restart the game. The company captures that level and one can resume from there. The company surely has planned other similar games. So, if this plan works out then the company can capture a big pie of the gaming business overall, he opined. It can capture a $4-5 billion gaming market share in India in the term, Singhvi added.
The Market Guru further added that the company is already doing beta running and testing and is expected to roll out this soon. Maybe by this quarter or the next quarter, the company should launch this. If this business works out then the growth revenue will be exponential, he said.
Singhvi said that secondly, cash per share is good at Rs 26. The valuation is attractive. Buy at a Minimum Target of Rs 175-200 and then review.
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