ICICI Securities Suggests Buy This Small Cap Services Sector Stock, Sees Robust 34% Gains

ICICI Securities has come up with a "Buy" recommendation on Just Dial Ltd. with a target price of Rs 870 apiece. Given the target price, if you buy the stock today at the current market price, it can fetch up to 34% return. Just Dial is a Local Search engine that provides local search-related services to users across India through multiple platforms. It is a small-cap company with a market capitalisation of Rs 5,543.54 crore.

Stock's Current Market Price, 52-Week High/Low & Returns

The stock is currently trading at Rs 652.55 apiece, down 0.76% from the previous close. Today it opened at Rs 661.95 apiece, while its previous close was 657.55 apiece. It traded its 52 week high at Rs 940 apiece and 52 week low at Rs 520 apiece, respectively.

The stock has given 2.57% positive return in 1 week, and 10.05% in the past 1 month, respectively. It has fallen 26.37% in 1 year. In the past 3 years, it has given 92.38% positive return and in the past 5 years, it has given 44.4% positive return.

More clarity emerges on new businesses, buy with a target price of Rs 870/share

The stock has corrected ~25% in the past year due to concerns regarding growth prospects and fears that the parent may delist the entity, in our view. We think these concerns are overpriced and current valuations provide an attractive opportunity to BUY with an upside skew of 3:1. In view of the better-than-expected margin outlook, we increase our EPS estimates for FY24E/FY25E by 15%/9%. We increase our target price to Rs870 (~11x FY25E EV/EBITDA) from Rs750 as we upgrade earnings and rollover the target by 6 months.

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.