Nice analysis Dhurva. I also looked at the company but had my own reservations due to its very small size and options trading revenue (a small red flag for me) along with a structural issue of having many clients from banks to PE but but a glass ceiling in the subscription based model. Another company, Apollo Finvest (Into Lending Tech Stack), presented a different view where they envisioned that most of the data regarding their customers would be in the hands of the platforms like Zomato, which could have better knowledge regarding the restaurant rather than a bank or some other lender. Similarly, I believe companies like MagicBrick and 99acres would eventually have better prospects as they have both customer property data along with a transaction history and an integrated direct banks and NBFC tie-ups. Along with this real estate is subject to more negotiation in pricing than any other asset class. These factors reduces the need for their services for retailers who are more interested in at least seeing and buying along with this the company's subscription model makes it very hard for them to go to retailers (Similar to Bloomberg Terminal, which is used mostly by Big Firms).
1. Any comparable companies in the US or other developed markets and how they performed over real estate cycles?
2. If the end industry is cyclical in nature, how can this B2B service be any different? Does this look like a long term structural story and not prone to any tech/gov disruptions?
Whats with the F&O Trading revenue ? Massive red flag !
Nice analysis Dhurva. I also looked at the company but had my own reservations due to its very small size and options trading revenue (a small red flag for me) along with a structural issue of having many clients from banks to PE but but a glass ceiling in the subscription based model. Another company, Apollo Finvest (Into Lending Tech Stack), presented a different view where they envisioned that most of the data regarding their customers would be in the hands of the platforms like Zomato, which could have better knowledge regarding the restaurant rather than a bank or some other lender. Similarly, I believe companies like MagicBrick and 99acres would eventually have better prospects as they have both customer property data along with a transaction history and an integrated direct banks and NBFC tie-ups. Along with this real estate is subject to more negotiation in pricing than any other asset class. These factors reduces the need for their services for retailers who are more interested in at least seeing and buying along with this the company's subscription model makes it very hard for them to go to retailers (Similar to Bloomberg Terminal, which is used mostly by Big Firms).
Good one Dhruva.
1. Any comparable companies in the US or other developed markets and how they performed over real estate cycles?
2. If the end industry is cyclical in nature, how can this B2B service be any different? Does this look like a long term structural story and not prone to any tech/gov disruptions?