Mach Conferences Hits 20% Lower Circuit After H2 Results Show 33% Net Profit Drop – What Investors Need to Know
In a dramatic turn of events, shares of Mach Conferences & Events Limited plunged 20% during Monday’s trading session, hitting the lower circuit at ₹155 per share on the Bombay Stock Exchange (BSE). This sharp drop followed the company’s announcement of its H2 FY25 financial results, which revealed a 33% quarter-on-quarter decline in net profit, sparking concerns among investors.
With a market capitalization of ₹326 crores, the company’s shares slumped from the previous close of ₹193.7, extending a downtrend that has seen the stock lose nearly 47% over the past year, and 22% in just the last month. Despite the shock, the stock is still above its 52-week low of ₹148.
Weak Financials Trigger Sell-Off
The selling pressure came after Mach Conferences & Events Limited posted its H2 FY25 earnings on Friday evening. Here’s a snapshot of key financials:
- Revenue from operations declined marginally to ₹116 crores in H2 FY25 from ₹119 crores in H1 FY25, though it marked a robust 63% increase from ₹71 crores in H2 FY24.
- Net profit fell significantly by 33% QoQ to ₹6 crores from ₹9 crores in the previous half-year, although it was up 50% YoY from ₹4 crores in H2 FY24.
- EBITDA stood at ₹7 crores, down 36% QoQ from ₹11 crores, but marginally higher than ₹6 crores a year ago.
- EBITDA margin narrowed to 6%, compared to 10% in H1 FY25 and 9% in H2 FY24.
The sharp drop in both profit and margins raised red flags about operational efficiency, triggering panic selling.
Strategic Acquisition: Travexel Events
Alongside the results, the company announced a strategic acquisition to boost its service portfolio. Mach Conferences’ board has approved the acquisition of a 60% stake in Travexel Events and Travel Private Limited, a company operating in the Tours and Travel sector, specializing in corporate conferences, exhibitions, and travel arrangements.
The deal will involve:
- ₹1.5 lakhs for equity shares
- ₹48.5 lakhs for preference shares
- Completion timeline: 60 days, fully in cash
This acquisition is expected to make Travexel a subsidiary of Mach Conferences, but will remain under joint control with its current promoters. While strategic, this move is yet to inspire confidence in the market, especially in the backdrop of weakening profitability.
Dividend Announcement
Despite the dip in earnings, the company’s board has recommended a dividend of ₹1 per equity share (10% of the face value of ₹10), signaling a willingness to reward shareholders. However, investors appear to be more concerned about the deteriorating margins and falling net income.
Company Overview
Mach Conferences & Events Limited is a leading player in the MICE (Meetings, Incentives, Conferences, and Exhibitions) industry. The company offers end-to-end solutions for corporate events, including:
- Venue selection
- Accommodation
- Transportation logistics
- On-site coordination
- Local activities
Its deep expertise and wide service offerings have helped it establish a niche in the highly competitive corporate event management sector.
Key Financial Ratios
| Metric | Value |
|---|---|
| Market Cap | ₹326 Cr. |
| Current Price | ₹155 |
| 52-Week High / Low | ₹314 / ₹148 |
| Stock P/E | 23.0 |
| Book Value | ₹51.8 |
| Dividend Yield | 0.00% |
| Return on Capital Employed (ROCE) | 23.3% |
| Return on Equity (ROE) | 17.9% |
| Face Value | ₹10.0 |
Conclusion
The 20% crash in Mach Conferences & Events Limited stock is a stark reminder of how quickly investor sentiment can shift based on earnings performance. While the company’s strategic acquisition and YoY growth provide some optimism, the steep QoQ decline in profits and margins is a key concern. Whether the stock can rebound will depend on how effectively the company integrates Travexel and improves its operational efficiencies in the coming quarters.
Q&A Section
Q1: Why did Mach Conferences’ stock hit a 20% lower circuit?
A: The stock plunged after the company reported a 33% drop in net profit for H2 FY25, triggering panic among investors.
Q2: How did the company’s revenue perform?
A: Revenue dropped slightly from ₹119 crores in H1 FY25 to ₹116 crores in H2 FY25 but saw a 63% YoY increase.
Q3: What about the company’s margins and EBITDA?
A: EBITDA declined by 36% QoQ to ₹7 crores, and EBITDA margins fell from 10% in H1 to 6% in H2 FY25.
Q4: What is the new acquisition announced by the company?
A: Mach Conferences is acquiring a 60% stake in Travexel Events and Travel Pvt. Ltd. for a total of ₹50 lakhs in cash.
Q5: Is the company still offering dividends despite the weak results?
A: Yes, the board has recommended a dividend of ₹1 per equity share for FY25.
Q6: How has the stock performed recently?
A: The stock is down 22% in the last month and over 47% in the past year.
Q7: What is Mach Conferences’ area of business?
A: The company specializes in managing corporate events, conferences, exhibitions, and travel-related services under the MICE segment.
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