This Small Cap Low PE IT Stock Below Rs. 100 Is Seen To Be A Multibagger In Some Years

Multibagger stocks or the stocks that multiply in price i.e. becomes x times in a small span are good bets for making good returns. If we are to look out for the term 'multibagger' term it was introduced by Peter Lynch.

Here are a few characteristics of multibagger stocks which facilitate their recognition:

Characteristics of Multibagger Stocks

These companies/ stocks have made a niche for themselves in the industry and have a competitive advantage.

Make good profits and even show fast sales growth

Typically the potential multibagger stocks are small with a lower market cap

Also, they command a reducing or low debt

Free cash flow at the company are on a growing path

High promoter holdings

High and possibly increasing RoE

So, with these criterions at hand, you can be able to through in-depth analysis, you can zero in on the likely multibagger. Likewise, here is a stock i.e. seen to yield multibagger returns in some years.

 

Kellton Tech Solutions:

This is a low priced stock of below Rs 100 from the IT space. The company founded in the year 2009 collaborates with companies worldwide to craft unique IT solutions, provide cutting-edge technical consultation and integrate business-changing systems. The company caters to clients across areas including leaders in retail, travel, E-commerce, education, hospitality, manufacturing, consumer goods, logistics, supply-chain management, lifestyle, non-profits and banking, financial services & insurance.

Kellton Tech is listed on India's largest stock exchange BSE and NSE and is ISO 9001:2015 and CMMI Level 5 certified. Its a multinational entity with offices in Asia, North America and Europe.

 

Company's SWOT analysis

The company's one of the prime strength is rising cash flow and cash from operating activity. The opportunity despite high valuations in the IT space is its low PE of 9.67. While of the negatives, the company is recording ROE in a declining trend. It is constantly logging an increase in free cash flow. At the end of Fy21, the FCF is at Rs. 73.76 crore as against Rs. 3.07 crore. The other negatives are a high promoter pledging of over 12%.

Also, in comparison with its peers, the concern arises in respect of its debt which is on the higher side, nevertheless it is reducing and is not perceived as a risk for the firm.

Financials at the company are also ok with net profit at the concern declining only marginally YoY to Rs. 18.83 crore. Sales on the other hand is recording gains coming in at Rs. 210.36 crore in the March ended quarter of Fy22.

 

Kellton Tech Announces Strategic Business Restructuring, Integrates Global Operations to Meet Growth Aspirations

Under a new initiative called 'OneKellton,' Kellton Tech integrates its global operations and enables clients to access an expanded suite of digital transformation solutions under one umbrella. The global leader in next-generation digital transformation and enterprise intelligence solutions, has announced the strategic realignment of its business under the 'OneKellton' initiative. As part of this,  Kellton Tech has integrated its global operations to improve client services and become an even stronger partner of choice for digital transformation and innovation.

 

Stock price trajectory

The stock before December in a month's time gained big time and clocked 104% return in a span of just 4 weeks but has now inched sharply lower. On a YTD basis the stock is up close to 12% and in a year's time has given negative returns. The stock's all time low and high price are 6.55 and 135, while its 52-week low is 39.3 per share. In today's session the stock settled at Rs. 70.6 per share on the NSE.

Disclaimer:

The stock is touted to be a multibagger by experts and likewise we have done the analysis on the same. Please do not construe the analysis as an investment advice into it.