Hifsa Raja

Octopus Digital Limited sales increased by 10% to Rs575 million in the first nine months of the calendar year 2022 (9MCY22) from Rs524 million over the corresponding period of the previous year. The company’s gross profit increased by 3% to Rs415 million in 9MCY22 from Rs403 million in 9MCY21.The profit-before-taxation jumped 41% to Rs530 million from a profit-before-tax of Rs376 million in 9MCY21. The profit-after-taxation also jumped 43% to Rs501 million in 9MCY22 from a post-tax profit of Rs350 million in 9MCY21, reports WealthPK.

The digital marketing and e-commerce industry in Pakistan has shown significant growth over the past few years, driven by increasing internet penetration, rising consumer demand, and the growing adoption of mobile devices. This trend is expected to continue in the coming years, which could provide opportunities for Octopus Digital Limited to further expand its business.

Earnings Growth Analysis

The company has managed to post earnings per share from 2019 to 2021, whereas its earnings growth nosedived in 2020, but rebounded the following year. The company recorded EPS of Rs2.53 and earnings growth of 32.67% in 2021.

Industry Comparison

NetSol Technologies, Avanceon Limited, Systems Limited, and ARB Berhad have all been regarded as rivals of Octopus Digital Limited. The market value of Octopus Digital Ltd is Rs7 billion. Systems Limited and Avanceon Ltd have the largest market capitalisations of Rs133 billion and Rs21 billion, respectively.

Profitability

The gross profit margin for Octopus Digital Limited was 75.69% in 2021, which was lower than 91.99% in 2020 as the cost of goods sold increased. The company had a net profit margin of 55.33% in 2021, which was lower than 75.29% in 2020.

Octopus Digital Limited has shown strong revenue growth and has been able to increase its profitability over the past few years. In addition, the digital marketing and e-commerce industry in Pakistan is expected to continue to grow, which could provide further opportunities for the company to expand its business.

Company Profile

Octopus Digital was incorporated in Pakistan on December 29, 2017, as a private limited company, which was converted to a public company on November 11, 2020, under the Companies Act 2017. The company is a wholly-owned subsidiary of Avanceon Limited. The prime business of the company is to carry out Information Technology-enabled services, which include but are not limited to online data/information storage, online monitoring and review of employees’ efficiency, online monitoring of cost and production efficiency, online monitoring and maintenance of plant and machinery, sale and trade of related software and equipment, etc.

Credit: Independent News Pakistan-WealthPk