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Ebix 4Q19 results ?3

01:28 03-Mar-20


The main color from the Ebix call is that it was plagued by persistent technical problems from the CEO commentary.  In light of that, I waited for the transcript of the prepared remarks, where this comment
The timing will depend on the regulatory process involved and the time taken by SEBI to approve the DHRP
and others leads me to believe that the IPO will slip past the original July projection.  In fact, multiple acquisitions have been delayed due to regulators, and legal fees were a head wind to close out 2019.  Management predicts, a "relatively clean slate" ahead, though.

For the existing businesses and balance sheet, debt stayed flat YoY, and management is reducing interest payments.  The BSE JV is now live (writing policies) and in the process of opening 75 more stores.  More details should be released soon.  Management also says another big win in U.S. insurance is imminent.

Perhaps the most interesting point was that the majority of the current travel business is within India, rather than international, which accounts for the low impact so far.  However, that projection excludes the pending Yatra acquisition, and I note that management is still targeting new bus exchange deals worth $50M annually.  We will have to see how the virus situation evolves in India, where there can be a big gap between official and real.

Overall, not much changes with EBIX.  Getting the IPO done remains paramount, and we're still waiting on details.  Some of the management team does seem an improvement over the low bar set by past calls but the CEO is still a major negative from a PR standpoint.  However, I think that is already priced into the stock, along with IPO delay through the second half.  Waiting on regulators is never appealing, but if they start to come through, we could see the stock rebound sharply.  Otherwise, we'll have to watch the virus situation in India for a more gradual melt up or down.  Further declines would also be justified if we progress through the summer and fall without IPO or regulatory progress.

On 3/2/20 8:22 AM, Esekla wrote:
Ebix has reported its fourth quarter results:
  • $1.04 of EPS beats by a nickel
  • from $146.2M, which misses by $7.8M

EBIX shares haven't traded in the pre-market yet and I don't expect these results will move them much.  Some growth this there, and the reasons for subdued execution are quite understandable.  On the IPO, the CEO just has this to say:

we are deep into the work that goes into launching the EbixCash IPO in India. In the short term, we will be announcing the addition of a fourth investment banker to our investment banking team.

Under different circumstances, this would be one of the few situations where I could understand aggressive buybacks, but the company doesn't have the balance sheet for that. The conference call is at 11am; I will certainly listen and expect to convey at least a little additional color.