Mumbai: Vakrangee Ltd, an e-governance service provider, crossed Rs 50,000 crore in market value on Monday. Once shunned by many in the market for being on the regulator’s radar following allegations of share price manipulation, the company has been a top gainer on the bourses in the last ten years. The company’s market cap has spiralled almost 100,000 per cent from Rs 50 crore in March 2009. Today, its market value of more than that of L&T Infotech, Info Edgeand Mphasis put together.
The stock soared 5.8 per cent to Rs 471.20 on Monday after the company’s net sales in the December quarter grew by 84.1 per cent YoY to Rs 1,802 crore while net profit grew by 87.5 per cent to Rs 247crore. The company is one of the main beneficiary of the government’s financial inclusion drive. It runs around 41,000 ‘Vakrangee Kendras’ across 18 states The stock has risen 192 per cent in last one year on the back of its earnings growth, but some analysts believe there is still steam left in the stock.
“We forecast that its store or “kendra” revenue and EBITDA will triple over FY 2017-20E, from a doubling of kendras to 75,461; Amazon’s activation of services in 58 per cent of its kendras; and an increase in mature stores to 75 per cent from 45 per cent” said Neerav Dalal, analyst, Kim Engg Securities. “While 7-Eleven’s ASEAN partners trade at 31.7 times FY 2019 estimated EPS, we value Vakrangee at 36 times FY 2019 estimated earnings, implying a 0.83 PEG. This still represents a 62 per cent discount to Indian consumer stocks’ 2.1 PEG”.