The automotive industry is a global behemoth that includes car design, development, manufacture, marketing, and sales. It is one of the world’s greatest economic sectors in terms of revenues. Key players include major manufacturers from the United States, Europe, Japan, and, increasingly, China and India.
Electrification, self-driving technologies, and shared mobility services are all driving substantial transformations in business. Connectivity and digitization are transforming both automobiles and driving experiences. The emergence of ride-sharing and car-sharing businesses is upending established ownership arrangements.
Despite obstacles such as supply chain disruptions and chip shortages, the sector continues to develop and adapt to shifting consumer tastes and technological advances.
Automotive Industry Overview
The automobile industry is one of India’s most important pillars of the economy. Its strong forward and backward integration makes it a critical economic growth. The expanding population, greater disposable income, easy access to credit and finance for the purchase of vehicles, and favorable government regulations are the primary drivers of the Indian automobile industry.
The Indian automotive industry increased from $114 billion in FY23 to $121.5 billion in FY24, which has grown by 6.58%. It is expected to reach $247.4 billion in the financial year 2033, which will grow at a CAGR of 7.13% during the period 2024-2033. It makes up more than 7.1% of the country’s GDP and 45% of the manufacturing gross domestic product of the nation.
Company Overview of IZMO
IZMO Limited was established in 1995. It is one of the world’s leading players in automotive visual and interactive marketing solutions. IZMO Limited owns the world’s largest collection of automotive images and animation and has a client base of the largest automotive retail groups in the world. IZMO Limited was ranked 116th in India Growth Champions 2023 by The Economic Times and 465th in High Growth Companies Asia Pacific 2022 by The Financial Times.
The company is a product specialist in e-marketing solutions for the automotive sector, providing a comprehensive SaaS platform for digital retail, CRM for after-sales, and performance consulting for automotive retail. The company has diversified its business mix to include automotive solutions, interactive media solutions, and AI platforms. The company’s majority of revenue comes from exports, which is to be 88.5% of the revenue, and the remaining 11.5% will be domestic.
Segment Analysis of IZMO
IZMO Limited has a strong focus on digital retail platforms, interactive media products, and AI-driven analytics. The company operates three main business divisions, such as izmo Cars, izmo Studio, and FrogData.
IZMO Cars division offers a specialized e-marketing SaaS solution for automotive traders, providing a multinational presence with a multilingual platform. This division has been divided into izmo auto izmo.ai and PartsVelocity CRM. It contributes to 32% of the revenue.
IZMO Studio is the world’s largest provider of automotive images, videos, and animations. The izmo Studio is divided into izmo Stock, izmo FX, and izmo VR.
izmo Stock is one of the top automotive stock images. It contributed to 42% of the revenue. Frog Data is IZMO’s AI platform for automotive decision intelligence. It contributed to 26% of the revenue.
Major clients of IZMO
IZMO Limited has a strong presence in the global market, which includes 65% in North America, 23% in Europe, and 12% in Asia. It has operated in 7 countries around the world. IZMO Limited’s top customers are organized into Microsoft (2%), Stellantis & You France (4%), Add-on Auto (6%), and Others (88%).
Clients are categorized by industry
Information Technology: Microsoft, Sony PlayStation,
Automobile Industry: Audi, Nissan, Ford, Renault, Honda, Suzuki, Toyota, ACURA, FIAT, Porsche
Car Rental: Hertz, AVIS, LeasePlan, Europcar, Arval, Terberg leasing
Acquisition with Geronimo Web
IZMO Limited has announced the acquisition of Geronimo Web. It is a US-based subsidiary of izmo Inc. Geronimo Web is the market leader in digital marketing programs for automotive OEMs and dealerships. This will help IZMO’s position as a top digital web platform provider in key markets across the US, Europe, and South America.
Additionally, acquisitions will expand to reach more than 4000 dealers worldwide, providing services across 37 countries and 16 languages. Geronimo’s OEM relations and dealer network will provide IZMO with a ready market for its diverse product range.
Shareholding Pattern of the Last 3 Quarters
IZMO Limited’s shareholding pattern has promoters (28.51%), FIIs (1.16%), and the public (70.34%) in Q3 FY24. The promoter has increased its stake from 28.51% to 31.90% in Q4 FY24. FIIs have also increased their stake by 3.12% in the last two quarters, from 1.16% to 2.44% in Q4 FY24 and 4.28% in Q1 FY25. Although public holdings decreased by 6.65% in the last two quarters, from 70.34% to 65.66% in Q4 FY24 and 63.69% in Q1 FY25.
Normally, from the company’s point of view, the promoters know the company’s operations, financial strength, and future prospects. Increasing promoter holding means betting big on their own company, showing promoters believe the company will do well in the future. It will be good to invest in the company.
Financial Analysis of IZMO
| FY24 | FY23 | FY22 | FY21 | FY20 | |
|---|---|---|---|---|---|
| Revenue (in crores) | ₹187 | ₹154 | ₹132 | ₹116 | ₹101 |
| Net Profit (in crores) | ₹26 | ₹20 | ₹16 | ₹27 | ₹11 |
| Operating Profit Margin (%) | 14.88 | 13.68 | 12.57 | 23.85 | 12.81 |
| Net Profit Margin (%) | 13.94 | 13.01 | 12.11 | 22.95 | 11.01 |
| ROCE (%) | 8.85 | 7.47 | 6.37 | 11.11 | 5.99 |
| Debt/Equity | 0.01 | 0.02 | 0.02 | 0.05 | 0.02 |
Coming into the financial analysis of IZMO Limited, the company’s revenue has increased over the last five consecutive financial years. The revenue has risen from ₹154 crores in FY23 to ₹187 crores in FY24, and it has grown by 21.43%. IZMO Limited’s revenue mainly comes from domestic sales (12%) and exports of software sales and services (88%). The company’s revenue growth has had a compound annual growth rate (CAGR) of 16.65% for the last four years.
IZMO Limited’s net profit has grown over the last 3 years. It has increased from ₹20 crores in FY23 to ₹26 crores in FY24. which has grown by 30%. The company’s net profit growth has had a CAGR of 23.99% for the last four years. EBITDA has increased by 36.91% YOY as compared to FY23.
IZMO Limited’s operating profit margin has improved from 13.68% in FY23 to 14.88% in FY24. It has been over 12% in the last 5 years. The net profit margin of the company has risen from 13.01% to 13.94% in FY24. It has maintained over 11% in the last 5 years. In FY24, the company’s ROE and ROCE were 8.50% and 8.85%, respectively. IZMO Limited is an almost debt-free company, although it has a reduced debt-to-equity ratio of 0.2X to 0.1X in FY24.
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Future Plans of IZMO
- IZMO Limited is aiming for significant revenue growth to reach a turnover of 500 crores by the financial year 2027-28.
- The company is entering Germany to establish operations and expand its presence in Spain to improve its market presence and increase its customer base and revenue.
- IZMO Limited is expanding digital retail platforms in European and U.S. markets to improve customer reach and enhance the online car-buying experience.
- IZMO Limited will focus on introducing new products in existing geographic areas with continuous R&D investment. Such as izmoEmporio for 3D virtual showrooms, izmoVR for VR lead generation platforms for automotive, and izmo.ai for AI solutions for customers.
- IZMO Limited will be focusing on the development of virtual reality-based products. It will help the potential car buyer to do a virtual test drive using VR software and hardware.
- The company is expanding its AI and data intelligence division, FrogData. It will provide advanced analytics and decision-making tools for the automotive industry.
- IZMO Limited is focusing on growing existing products in existing geographic areas, which includes izmoStudio for growth in online auto sales, izmoCars for growth in the French market, and FrogData for growth in AI & data analytics.
- The company is focusing on existing products in the new geographic area. Such as izmoAuto for re-introduction in the USA and full-suite digital solutions in Germany, Spain & Switzerland.
Financial Metrics of IZMO
Some of the key financial metrics of IZMO Limited are given below.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹507.00 | Market Cap (Cr.) | ₹714.83 |
| EPS (TTM) | ₹18.41 | Stock P/E (TTM) | 27.44 |
| ROE (TTM) | 8.50% | ROCE (TTM) | 8.94% |
| ROA (TTM) | 7.16% | P/B Ratio | 2.34 |
| Debt to Equity | 0.01 | Current Ratio | 1.96 |
| Promoter Holding (%) | 31.90% | FII Holding (%) | 1.47% |
| Operating Profit Margin | 14.88% | Net Profit Margin | 13.94% |
Conclusion
We are at the end of the article on the conclusion of IZMO Limited, The company is a key player in the global automotive industry. It has a strong financial analysis, robust growth trajectory, strategic expansion position, and an acquisition strategy that will aim to transform the automobile purchasing process on all continents by concentrating on cutting-edge digital and artificial intelligence technologies.
The increasing promoter stakes and impressive financial metrics highlight the confidence in IZMO’s future prospects, making it a convincing investment opportunity. What do you think about IZMO Limited’s future perspectives? Let us know in the comments below.
Written By Nikhil Naik
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