MTDL delivered another strong and consistent set of results for 1H25, with net profit up 6.6% y-y to IDR294bn and sales up 11% y-y to IDR11.7tn. This was achieved despite macroeconomic weakness in 1H25. The performance was broad-based, with both the distribution and solution segments posting healthy growth. Margins were stable, cash flow improved, and the balance sheet remained healthy. MTDL’s ability to compound earnings through cycles continues to support our positive view.
Double-digit topline growth led by both segments
MTDL booked IDR11.7tn in sales in 1H25 (+11% y-y), driven by: ● Distribution business (75% of revenue) up 7.2% y-y to IDR8.8tn. ● Solution & Consulting up 21% y-y to IDR3.4tn – FY24 was a low base.
Stable margins and inventory
Gross margin was slightly lower at 7.6% in 1H25 vs 7.7% in 1H24. However, the Solution & Consulting segment continued to support profitability with a healthy 11% GPM in 2Q25. EBIT margin stood at 4.5%, and net profit margin was 2.5%—flat y-y. Inventory days improved significantly to 32 in 2Q25, from a peak of 51 in 1Q23, reflecting leaner operations. MTDL maintained a net cash position of IDR1,004bn, with zero gearing. ROE and ROA stood at 17% and 6.4%, respectively, supported by strong execution and efficient capital use.
IT services – steady compounder
Recent media reports indicate improving IT procurement trends in 2H25. The Ministry of ICT is likely to boost spending on cybersecurity and digital infra. Private sector digital spending, particularly from banks and telcos, is also recovering, driven by GenAI initiatives and cloud migration. This, we believe, should benefit MTDL’s solution and enterprise hardware businesses. See the news here and here.
Valuation remains attractive vs long-term history
We reiterate our Buy rating on MTDL IJ. The company’s ability to deliver consistent profit growth, maintain high ROE, and preserve a strong balance sheet positions it well for long-term compounding, in our view. With improving sector sentiment and supportive valuation, we believe MTDL remains one of the best compounders in the Indonesia tech space.
We maintain our Buy rating and TP of IDR1,000. Our DCF-based, TP assumes a WACC of 11%, beta at 0.6 and a risk-free rate of 7.1%. At our TP of IDR1,000, MTDL would trade at 15x 2025F P/E (EPS: IDR67) vs its historical average P/E of 9x (excluding the Covid period). MTDL currently trades at a PE/ROE of just 0.5x—close to -0.9 standard deviation below its 10-year average. Over the past decade, the company has compounded EPS 3x while keeping ROE steady at 17–19%.
Key risks include a slower recovery of IT spending, execution delays in the FPT JV, and weakening demand in distribution if consumer tech cycles soften. Catalysts for the stock include stronger-than-expected momentum in cybersecurity and a faster ramp-up of new brands.
Fig. 1: MTDL 1H25 results — solid and consistent performance
Fig. 5: Inventory normalized — from peak 51 days to 32 days
Source: Company data, Verdhana research
INVESTMENT RATINGS A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.
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