Nuvama initiates coverage on this recent market debutant with up 70% upside potential
Krystal Integrated Services was listed at the bourses on March 21, 2024. The company raised a total of Rs 300.13 crore via its initial stake sale, selling its shares for Rs 715 apiece.
- Jun 25, 2024,
- Updated Jun 25, 2024 1:23 PM IST
Domestic brokerage firm Nuvama Institutional Equities has initiated coverage on the recently listed Krystal Integrated Services Ltd with up to 70 per cent upside potential. The brokerage sees the company as a one-stop solution provider offering a comprehensive range of services; well-positioned to capitalise on favourable industry dynamics and growing client base.
Krystal is a leading integrated facilities management services company in India, specializing in diverse sectors such as healthcare, education, public administration, airports, railways and metro infrastructure, and retail. With 77.6 per cent of its revenue sourced from government contracts, Krystal stands as a strong player in the industry, said Nuvama's IC report.
Shares of Krystal Integrated Services surged 8.5 per cent to Rs 883.99 during the trading session on Tuesday, commanding a total market capitalization of close to Rs 1,200 crore. The scrip had settled at Rs 814.70 in the previous trading session on Monday.
The company’s revenue composition is 54.7 per cent from integrated facilities management services (IFMS), 31.7 per cent from staffing services, 10.7 per cent from security services and 2.9 per cent from catering Services, Nuvama said. This diverse portfolio allows it to cater to a wide range of sectors with a large geographic footprint, making it a one-stop solution provider, it said.
Management anticipates the IFMS, Staffing, and Security services segment to grow 1.2–5 times faster than the industry average from FY23 to FY26E, with significant growth potential in the catering segment. The company has successfully renewed or extended relevant non-government customers contracts, ensuring continuity, said the brokerage report.
Krystal Integrated Services was listed at the bourses on March 21, 2024. The company raised a total of Rs 300.13 crore via its initial stake sale, which ran between March 14 and March 18, selling its shares for Rs 715 apiece. Stock is currently 24 per cent above its issue price.
Krystal has achieved an impressive 19 per cent revenue CAGR over the past decade, driven by strong industry tailwinds, new contracts, and high-quality service offerings. Operating exclusively on a B2B model, Krystal leverages its extensive service portfolio to provide bespoke solutions that enhance customer acquisition and retention, said the report by Nuvama.
Projections for FY24–26E indicate a sales, Ebitda and PAT CAGR of 27 per cent, 36 per cent and 40 per cent, respectively. with an expected EBITDA margin expansion by 97 basis points s to 7.7 per cent, reflecting positive operating leverage and a favorable service mix, said Nuvama.
"The stock is trading at 11.1 times and 7 times FY26E earnings and EBITDA respectively, presenting a discount compared to peers with similar service profiles. Given the strong earnings visibility and discounted valuations, we initiate coverage with a ‘buy’ rating and a target price of Rs 1,369," it added, suggesting a potential upside of 70 per cent from its previous close.
Domestic brokerage firm Nuvama Institutional Equities has initiated coverage on the recently listed Krystal Integrated Services Ltd with up to 70 per cent upside potential. The brokerage sees the company as a one-stop solution provider offering a comprehensive range of services; well-positioned to capitalise on favourable industry dynamics and growing client base.
Krystal is a leading integrated facilities management services company in India, specializing in diverse sectors such as healthcare, education, public administration, airports, railways and metro infrastructure, and retail. With 77.6 per cent of its revenue sourced from government contracts, Krystal stands as a strong player in the industry, said Nuvama's IC report.
Shares of Krystal Integrated Services surged 8.5 per cent to Rs 883.99 during the trading session on Tuesday, commanding a total market capitalization of close to Rs 1,200 crore. The scrip had settled at Rs 814.70 in the previous trading session on Monday.
The company’s revenue composition is 54.7 per cent from integrated facilities management services (IFMS), 31.7 per cent from staffing services, 10.7 per cent from security services and 2.9 per cent from catering Services, Nuvama said. This diverse portfolio allows it to cater to a wide range of sectors with a large geographic footprint, making it a one-stop solution provider, it said.
Management anticipates the IFMS, Staffing, and Security services segment to grow 1.2–5 times faster than the industry average from FY23 to FY26E, with significant growth potential in the catering segment. The company has successfully renewed or extended relevant non-government customers contracts, ensuring continuity, said the brokerage report.
Krystal Integrated Services was listed at the bourses on March 21, 2024. The company raised a total of Rs 300.13 crore via its initial stake sale, which ran between March 14 and March 18, selling its shares for Rs 715 apiece. Stock is currently 24 per cent above its issue price.
Krystal has achieved an impressive 19 per cent revenue CAGR over the past decade, driven by strong industry tailwinds, new contracts, and high-quality service offerings. Operating exclusively on a B2B model, Krystal leverages its extensive service portfolio to provide bespoke solutions that enhance customer acquisition and retention, said the report by Nuvama.
Projections for FY24–26E indicate a sales, Ebitda and PAT CAGR of 27 per cent, 36 per cent and 40 per cent, respectively. with an expected EBITDA margin expansion by 97 basis points s to 7.7 per cent, reflecting positive operating leverage and a favorable service mix, said Nuvama.
"The stock is trading at 11.1 times and 7 times FY26E earnings and EBITDA respectively, presenting a discount compared to peers with similar service profiles. Given the strong earnings visibility and discounted valuations, we initiate coverage with a ‘buy’ rating and a target price of Rs 1,369," it added, suggesting a potential upside of 70 per cent from its previous close.