MosChip Tech reports positive swing of Rs3.54cr in Q3 PAT to Rs2.11cr; Stock hits upper circuit

18 Jan 2022 , 09:31 AM

MosChip Technologies Limited reported financial results for Q3 and 9Months FY22 on Monday. The company said it continues to focus on Semiconductor / Embedded design services, Turnkey ASIC solutions, Semiconductor IP (Intellectual Properties), and IOT projects which have been enabling steady and sustainable growth.

Income from operations, EBIDTA, and Profit after tax for 9 months period ended is significantly higher than what the company has achieved in full-year FY21, the company said in a filing on Monday.

Consolidated income from operations increased from Rs27.40cr in Q3FY21 to Rs38.29cr in Q3FY22, an increase by 40% yoy. Income in Q2FY22 was Rs38.01cr.

EBIDTA increased to Rs6.38cr as against Rs2.64cr, an increase by 141% yoy, and 9% qoq from Rs5.83cr in Q2FY22. Profit After Tax (PAT) increased to Rs2.11cr as against a negative of Rs1.43cr, a positive swing of Rs3.54cr. PAT increase was 32% higher qoq from Rs1.60cr.

The company’s income from operations increased from Rs75.02cr in 9MFY21 to Rs110.23cr in 9MFY22, an increase by 47% yoy. EBIDTA increased to Rs17.33cr as against Rs3.95cr, an increase by 338% yoy. PAT increased to Rs5.44cr as against a negative of Rs8.01cr, a positive swing of Rs13.45cr.

The company stock was bullish on Tuesday and at around 9.35 am, Moschip Technologies Ltd was trading at Rs89.35 per share up by Rs4.25 or 4.99% (5% upper circuit) from its previous closing of Rs85.10 per share on the BSE.

Impact of recent Incentive Schemes to Semiconductor and ESDM Industry:
Government of India announced a semiconductor policy to promote both design and manufacturing of semiconductor chips in India. The total budget for the scheme is estimated around Rs76,000cr and it is distributed for
a) setting up CMOS and display fabs
b) Compound semiconductor fabs and ATMP ( packaging and testing ) units
c) Design Linked Incentives for fabless semiconductor companies that develop products and IP and
d) Infrastructure and support systems.

Moschip has been the first fabless semiconductor company in India that developed its own products and shipped millions of units. Even though Moschip will not directly get benefitted from items a and b, Moschip may be able to take advantage of DLI and related incentives. Moschip is in the process of understanding the details of the benefits that it can take advantage of and fuel its growth.

Additional Leasing Space:
The Company has signed up for additional office space to accommodate potential increase in head count expected in coming quarters.

Market Opportunity:
According to Semiconductor Industry Association (SIA) “The global chip market is projected to grow substantially in 2021, 2022 and beyond as semiconductors become essential component to every aspect of electronic devices that are part of our daily life.”

Semiconductors are the key components in every electronic system that includes smartphones, personal computers, Laptops, Communication and networking systems, medical equipment and Automobiles. Emerging technologies and applications in the areas of 5G communications and Artificial intelligence are further fuelling the growth. Semiconductor industry will benefit from the ongoing innovation and development in connectivity, data centres, communications, automotive, safety & security, infotainment, navigation, home automation, wearable devices, etc. and will continue to see growth in the coming decades.

Moschip’s solid foundation and track-record in taking both semiconductor and electronic products from specification to production and its unique capabilities in mixed-signal and high speed interface IP, positions the company to address the growth opportunities in semiconductor and ESDM sector. In addition, the recent announcement of silicon proven 8G high speed interface IP and other strategic initiatives helping the company to address emerging opportunities in the industry.