TRG Pakistan Ltd (TRG) held its analyst briefing earlier today, during which management discussed several key points:
In 9MFY25, the company reported a profit of PKR 4.3 billion (EPS: PKR 7.36), a significant turnaround from a loss of PKR 18.3 billion (LPS: PKR 30.67) in the same period last year. This improvement was primarily driven by a substantial rise in the IBEX stock price. However, the decline in Afiniti’s valuation amid its financial restructuring counterbalanced much of the gain from IBEX’s performance.
Afiniti’s debt load, incurred in 2019-2020 and amounting to US$500 million, was deemed unsustainable, prompting the company to undergo financial restructuring. As part of this process, Vista converted approximately 50% of its debt into convertible preferred shares, thereby acquiring a controlling stake in Afiniti.
TRGI invested $ 15 million in this restructuring, which increased its stake in Afiniti to 13%. Furthermore, in November 2024, IBEX, a portfolio company of TRGI, repurchased approximately 3.56 million shares from TRGI, reducing TRGI’s holding to around 13%.
The long-term investment value in TRGI rose to PKR 46.1 billion in 9MFY25, up from PKR 40.5 billion in FY23, reflecting a 14% increase largely due to the strong performance of IBEX’s stock price.
The customer experience (CX) industry faced a decline in volume during FY24, impacting both IBEX and Afiniti, which operate in this sector. However, a recovery was observed in 9MFY25, with IBEX’s revenue growing by 4%/6%/11% year-over-year during 1QFY25/2QFY25/3QFY25, respectively. This increase in IBEX’s revenue was mainly due to the company’s strategic expansion into new geographies and market verticals.
Management projects IBEX’s revenue for FY25 to be around US$540-545 million, representing a 7% year-over-year increase. Regarding Afiniti, management has indicated that, due to a decline in demand in the Predictive AI segment, further investments are being made in generative AI products.
Additionally, management clarified that there are currently no plans to pursue an IPO for Afiniti in the near future. They also refrained from commenting on a recent share buyback, labeling the matter as sub judice. However, they expressed their intention to appeal the recent Sindh High Court ruling, citing irregularities and issues within the decision.
Please note that this scrip is not part of our formal coverage.
Courtesy – AKD Research
