Nuvama Institutional Equities initiated coverage on Krystal Integrated Services, seeing a massive upside of 80 percent for the stock from current levels.
The domestic brokerage set a target price of Rs 1,369 per share, higher by 80 percent compared to the previous session's close.
Krystal is a leading integrated facilities management services company with 77.6 percent of its revenue sourced from government contracts. "The firm's successful track record in executing large, multi-location government contracts allows it to benefit from the increasing outsourcing of facility management services by the government," noted Nuvama.
At 10.30 am, shares of Krystal Integrated were quoting at Rs 844.8 apiece, higher by 3.6 percent on the NSE.
he brokerage said, "Krystal Integrated has achieved an impressive 19 percent revenue CAGR over the past decade, driven by strong industry tailwinds, new contracts, and high-quality service offerings."
The company serviced 262,277, 326, and 369 clients in FY21, FY22, FY23, and FY24, respectively, and onboarded 76, 70, 80, and 57 new clients in the same period. The number of locations served has increased from 1,962 to 2,487.
The firm's commitment to quality has resulted in long-term relationships, with four of its top ten clients in FY23 partnering with it for over a decade, added the brokerage.
"We expect the company's revenue to grow at a 27 percent CAGR over FY24-26, driven by strong client additions, aggressive bidding for profitable government contracts, and market share gains from smaller, single-service providers," said Nuvama.
For FY24-25, Nuvama sees a sales/EBITDA/PAT growth rate of 27 percent, 38 percent, and 40 percent respectively, with the EBITDA margin likely to rise by 97 basis points to 7.7 percent, as a result of positive operating leverage and a favorable service mix.
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