Buy This Midcap Stock From Financial Services Sector For 29% Return, Says Keynote Capitals

Renowned brokerage firm Keynote Capitals has assigned a "buy" on the stock of Ugro Capital Ltd, a midcap Financial Services sector stock. The brokerage sees a potential upside of up to 29% from its current level with the assigned target price of Rs 197 apiece. This company has a market capitalisation of Rs 1,081.67 crore. Below are key takeaways from the report:

Stock Outlook - CMP, Returns, & 52-Week Low/High

The current market price of Ugro Capital is Rs 153.30 apiece, up 2.99% as compared to its previous close. Its 52-week low as on 17 May 2022 is Rs 119.95 apiece and 52-week high as on 19 September 2022 is Rs 212 apiece, respectively.

The stock in a week declined 071% and gained 0.29% in 1 month. In 3 months it declined 5.22% and in 6 months declined 14.52%. In 1 year it declined by 19.08%. In 3 years it declined by 2.36%. However, it gained 100.65% in the past 5 years.

 

All set to unleash the potential of MSME Lending

According to the brokerage, In Q3 FY23, Ugro Capital Limited reported a staggering 81%/15% YoY/QoQ growth in interest income, as well as a 587%/51% YoY/QoQ increase in colending income. Over the past year, the assets under management have grown by 97% to 51Bn from 26Bn. Rising yield with constant cost of borrowing and falling cost to income coupled with its unique business model Ugro Capital is poised to capture the secular trend of growth in Indian MSME.

 

View & Valuation

The brokerage said, "Given its cutting-edge and data-driven model, along with positive and improving financial metrics, and the expertise of its experienced management team, we believe that Ugro Capital is well-positioned to seize upon the significant growth opportunity in the MSME Lending sector. We maintain our view on Ugro Capital Ltd. with a BUY rating with a target price of Rs. 197, valuing it at 1.2x FY24E BV."

 

Disclaimer

The stock has been picked from the brokerage report of Keynote Capitals. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.