KR Choksey Bullish On Small Cap Services Stock, Buy For Robust 83% Gains, Declares Dividend, Buy

Brokerage firm KR Choksey has assigned a Buy on Infibeam Avenues Ltd. for a robust gain of up to 83% with a target price of Rs. 28/share.

The Board of Directors of the company in a meeting held on Thursday, May 25, 2023, recommended a final dividend of Rs. 0.05/share of Re. 1 each i.e. 5% for the financial year ended on March 31st, 2023.

This is a small-cap services sector stock with a market capitalisation of Rs. 4,123.78 crore.

5% Final Dividend

In the exchange filing, the Board of Directors of Infibeam Avenues Ltd. said, "Recommended a Final Dividend of Rs. 0.05/- per Equity Share of Re. 1/- each (i.e. 5%) for the Financial Year ended on March 31, 2023, subject to the approval of Shareholders at the ensuing Annual General Meeting ("AGM") of the Company. The Company shall inform the date on which the Company will hold its Annual General Meeting for the year ended on March 31, 2023, the Record Date/ Book Closure for Final Dividend and the date from which dividend, if approved by the shareholders, will be paid in due course."

Valuation and View

KR Choksey said, "Infibeam has been reporting very robust growth in TPVs, GTRs, and NTRs on back of strong demand and favourable payments mix. With additional growth drivers like i) consistently converting EBITDA into free cash, ii) debt-free company and iii) a major capex cycle behind, Infibeam is charting a focused growth strategy for the next 3-5 years. Its new businesses are expected to drive gross margins over the long term once it reaches scale."

It added, "Infibeam is trading at 1.7x/1.3x its FY24E/25E Price/Sales (P/S) multiples, respectively. It is similarly trading at P/E multiples of 31.1x/23.3 on its FY24E/25E earnings. Given the strong growth witnessed in TPVs and NTRs, we now value the company on a Price/Sales multiple of 2.5x on FY25E sales. This yields a target price of INR 28 giving an upside potential of 87% from the CMP. Accordingly, we maintain our "BUY" rating on the shares of Infibeam Avenues."

Stock Outlook

On NSE, the stock's current market price os Rs. 15.35/share, up 1.66% from its previous close of Rs. 15.10/share.

It has given 4.42% positive return in 1 week and 9.64% in 1 month, respectively. It gave 2.68% positive return in 1 year, and 13.39% in 3 years, respectively. It declined 63.59% in 5 years.

The stock's 52-week high is Rs. 20.35/share and 52 week low is Rs. 12.85/share, respectively.

Disclaimer - The stock has been picked from the brokerage report of KR Choksey. 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 making any investment decision.