ICICI Securities Places Buy Small Cap Financial Services Stock For High Gain, Target Price Rs 1048

Broking firm ICICI Securities began coverage on Prudent Corporate Advisory Services Ltd. with a Buy call. The brokerage assigned a Target Price of Rs 1048 apiece on the stock, claiming a decent upside of 14% from its current level.

Prudent Corporate Advisory Services is a small-cap Financial Services sector company. It has a market capitalisation of Rs 1096.85 Crore.

Recommend BUY with target price of Rs 1,048 based on 25x FY25E EPS (adjusted for goodwill amortization) of Rs 42

The brokerage said, "We expect AAUM growth of 21% between FY23-25E, factoring yields dropping from 33bps in FY23 to 28bps in FY25E at a net level which results in EBITDA margin declining to 26.4% in FY25E compared to 28% in FY23. Non-MF revenue is expected to clock 11% CAGR between FY23- 25E driven by higher insurance sales as Prudent successfully uses its existing MFD base to cross sell insurance (Rs346/706mn revenue in Q4/FY23). Positive momentum in capital markets could boost the broking segment. Our 25x multiple justifies the strong earnings CAGR of 16.5% and average ROE of ~30% between FY23-25."

Stock Outlook & Movement

The stock's current market price on BSE is Rs 921.30 apiece, up 0.39% from its previous close of Rs 917.75 apiece. It traded 52-week high on Jan 03, 2023, at Rs 1106.95 apiece and 52 week low on Jul 14, 2022, at Rs 476.30 apiece, respectively.

The stock has fallen 0.63% in the past 1 week, whereas it jumped 1.04% in the past 1 month. It gave 5.95% positive return in the past 3 months. It jumped 86.73% in the past 1 year.

Disclaimer - The stock has been picked from the brokerage report of ICICI Securities. 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.