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Ebix 2Q21 results +3

12:14 09-Aug-21

The Ebix conference call has just concluded and the company has been severely impacted by job markets, especially in light of the collapse of the healthcare system in India.  As a result, the company was unable to fulfill contracted work there.  Vaccinations are turning that around and they are skewed toward the urban environments where Ebix employs, but it has had to raise salaries by 15-20% for programmers.  Salaries in other areas have yet to be restored.

Nonetheless, Ebix has reduced debt by $40M, or almost 5% over the past year.  Management hinted at refinancing in next quarter or two, and the EbixCash is still on schedule to IPO in January or February, with a prospectus in November.

Investment in India is beginning to normalize with some push back on India's horrible governance.  Vodafone is in settlement talks following the scrapping of the retrospective tax that helped wreck its business there.  Amazon is ending a JV in the country and Ebix is picking up market share in payments.  There are many other moving parts as well.  The insurance business expanding into Europe, and travel to and from the Philippines and Indonesia remains constrained.

In summary, Ebix is a reflection of the uneven global pandemic recovery.  The business growth is still there, but the prospects for showing the full levels of that immediately are shaky at best.  EBIX shares have recovered over $30 so far but we'll have to continue to track the global reopening to see more reasonable valuations much higher than that.

Ebix has announced its second quarter results:

• 76 cents of EPS beats by 17 cents
• from $246.3M of revenue, which beats by $19.3M

Management cites an acute employment shortage and impact from the pandemic in India and Brazil.   However, EbixCash has grown by 257% YoY.  The conference call is at 11am; more after that.

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