MosChip Tech reports positive swing of Rs3.54cr in Q3 PAT at Rs2.11cr; The stock reaches the upper circuit

MosChip Technologies Limited released its financial results for the third quarter and nine months of fiscal 22 on Monday. The company said it continued to focus on semiconductor/embedded design services, key ASIC solutions in hand, semiconductor IP (intellectual property) and IOT projects that have enabled steady and sustainable growth.

Operating income, EBIDTA and after-tax profit for the 9-month period ended are significantly higher than the company made in the full fiscal year 21, the company said in a Monday filing.

Consolidated operating income increased from Rs27.40cr in Q3FY21 to Rs38.29cr in Q3FY22, an increase of 40% year-on-year. Income at T2FY22 was Rs38.01cr.

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

The company’s operating income increased from Rs75.02cr at 9MFY21 to Rs110.23cr at 9MFY22, a year-on-year increase of 47%. EBIDTA increased to Rs17.33cr from Rs3.95cr, an increase of 338% YoY. PAT rose to Rs5.44cr from a negative of Rs8.01cr, a positive swing of Rs13.45cr.

Shares of the company were bullish on Tuesday and by 9:35 a.m. Moschip Technologies Ltd was trading at 89.35 rupees per share, up 4.25 rupees or 4.99% (5% upper circuit) from its previous close of 85.10 rupees per share on the BSE.

Impact of recent incentive programs on the semiconductor and ESDM industry:
The Indian government has announced a semiconductor policy aimed at promoting both the design and manufacture of semiconductor chips in India. The total program budget is estimated at around Rs76,000cr and it is distributed for
a) set up CMOS and display fabs
b) Compound semiconductor factories and ATMP units (packaging and testing)
c) Design-related incentives for fabless semiconductor companies that develop products and intellectual property and
d) Infrastructure and support systems.

Moschip was the first fabless semiconductor company in India to have developed its own products and shipped millions of units. Even though Moschip will not directly benefit from items a and b, Moschip may be able to take advantage of the IDD and related incentives. Moschip is figuring out the details of the benefits it can leverage and fuel its growth.

Additional rental space:
The Company has signed for additional office space to accommodate the potential increase in staff expected in the coming quarters.

Market Opportunity:
According to the Semiconductor Industry Association (SIA), “The global chip market is expected to grow significantly in 2021, 2022, and beyond as semiconductors become essential components of all aspects of electronic devices that are part of our daily lives. “.

Semiconductors are the key components of every electronic system which includes smartphones, personal computers, laptops, communication and networking systems, medical equipment and automobiles. Emerging technologies and applications in 5G communications and artificial intelligence are further fueling growth. The semiconductor industry will benefit from continued innovation and development in the areas of connectivity, data centers, communications, automotive, safety and security, infotainment, navigation, home automation, portable devices, etc. and will continue to experience growth over the coming decades.

Moschip’s strong foundation and track record in moving semiconductor and electronic products from specification to production, along with its unique high-speed, mixed-signal IP interface capabilities, enables the company to seize growth opportunities in the semiconductor and ESDM industry. Additionally, the recent announcement of a silicon-proven 8G high-speed IP interface and other strategic initiatives are helping the company seize emerging opportunities in the industry.

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