Buy This Small-Cap Financial Services Sector Stock For Robust 31% Potential Gains: ICICI Securities

ICICI Direct has a buy call to 5Paisa Capital Ltd, a leading discount stock broker backed by the Nirmal Jain-led IIFL group. The brokerage suggests buying the stocks of the company for a target price of Rs 375 per share, sees31 potential gains. According to the brokerage, the company's aggressive client accretion with 86% of incremental clients from Tier-II & below cities and 75% of customers below 35 years of age. The company has an overall cash market share of ~3% as on June 2022.

5Paisa Stock Outlook

The current market price (CMP) of Gland Pharma Ltd is Rs 287.05 per share, it was opened at Rs 292 per share. It hit the 52 week low level early this July on 07. Currently, it is trading Rs 22.2 above its 52-week low level. The 52-week high it touched on 15 July 2021, at 580 per share.

The shares of the company have moved up nearly 5.79% in one week as of now. In the last one month, its share price has fallen 8.07%, 22.88% in 3 months, and 45.88% in the past 1 year, respectively. 18.23% in three months, and 8.04% in 1one month, however. In the last one week, it gained roughly 2.98%. in the past 3 years, it has given positive returns of 30.95%.

As mentioned earlier, the stock of 5Paisa Capital has the potential to gain 31% in 12 months if the stocks are purchased at the CMP, considering the estimated Target price of Rs 375.

Q1FY23 Results

Moderation in client acquisition; cost control aid PAT.

• ADTO was up 13% QoQ and 136% YoY to Rs 1.36 lakh crore.
• Moderation in client acquisition at 2.3 lakh; total clients at 29.6 lakh.
• Revenue was up 40% YoY but down 5% QoQ due to decline in brokerage.
• Sequentially opex declined 10%. Thus, PAT was up 62% QoQ to Rs 7.5 crore.

Buy For a Target Price of Rs 375/share

ICICI Securities said, "5Paisa's share price has grown more than 40% over the past three years. Sustained improvement in profitability margin needs to be vetted. However, fintech offering in large opportunity market keeps us positive on the future growth prospects. We retain our BUY rating on the stock. We lower multiple and value 5Paisa at ~24x FY24E EPS and 2.4x FY24E revenue to arrive at revised target price of Rs 375 per share."

 

Key triggers for future price performance

• Focus on improving quality of customer to aid revenues growth & ARPU.
• Major IT spends over, thus control on opex to aid earnings trajector.
• Improving granularity in client funding book to mitigate risks.
• Sustained earnings & gain in market share remain upside triggers

About - 5Paisa Capital Ltd

5paisa Capital Ltd. is one of India's fastest-growing Discount Brokers and the first Publicly Listed online broking company. The company is ranking among the top 10 discount broking firms in the country. 5paisa enjoys strong backing by the IIFL, India's leading diversified financial services company. With a daily turnover of over 30,000 Cr+, we have over 450,000 clients and 3.5 Million+ app users. 5paisa platform offers all financial services like Equity Trading, Mutual funds investments, Insurance, Research Products, Commodity and Currency Trading, Digital Gold Investment, Robo Advisory and Personal Loans under one roof.

Disclaimer

The stock has been picked from the ICICI Securities brokerage report. 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 check with certified experts before taking any investment decision.