Rs 666 to Rs 3,397: This stock gave 410% return in 1 year; is it still worth buying?

Shares of Hinduja Global Solutions (HGS) were locked in a 5 per cent upper circuit for the second consecutive session today after the company posted a strong set of numbers for the quarter ended June 2021.   The company reported a net profit of Rs 117.02 crore for the quarter ended June 2021 compared to a profit of Rs 47.94 in the year-ago period. Revenue from operations grew 25 per cent to Rs 1,550.52 crore in the June-ended quarter against Rs 1,235.89 crore a year ago.   The earnings per share (EPS) of the company has increased to Rs 56.05 in June 2021 from Rs 22.97 in June 2020.   The stock opened 5 per cent higher at Rs 3397.60 against the previous close of Rs 3,235.85. With a market capitalisation of Rs 7,094 crore, the midcap share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.   The multibagger stock has surged from Rs 666 to Rs 3,397.6 mark today in the last 12 months - yielding around 410 per cent in this period. An amount of Rs 5 lakh invested in this stock a year ago would have turned into Rs 25.5 lakh today. In comparison, Sensex rose 42 per cent in one year.   The company said it added two new logos across verticals for core BPM services and nine for HRO/ Payroll Processing during Q1 FY22. It also signed nine engagements with new and existing clients for HGS Digital services (RPA, digital, analytics and Social Care services).   "Looking ahead, we are investing in driving aggressive growth for the rest of the year. While we expect a robust Open Enrollment season in the healthcare vertical, we are also setting up new centers and looking to hire significantly to support new client wins in the UK and Jamaica," Partha DeSarkar, Global CEO, HGS.   According to MarketsMojo, the company has declared positive results for the last 4 consecutive quarters. It has a strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.59 times.   Also, the technical trend has improved from Mildly Bullish on March 4, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, and OBV.   The stock is trading at a discount compared to its average historical valuations and has an 'Attractive' valuation and the price/earnings-to-growth (PEG) ratio of the company is 0.2.   The company also announced that it has entered into definitive agreements to divest its Healthcare Services business to funds affiliated with Baring Private Equity Asia (BPEA), one of the largest private alternative investment firms in Asia.   The transaction based on enterprise value of US$ 1,200 million, subject to closing adjustments, is expected to complete within 90 days, subject to shareholder and other regulatory approvals.   “Our Healthcare Services business has steadily grown over the years. We reached a stage where we could recommend to promoter to divest stake in this business to unlock value for all HGS stakeholders. We will use the generated funds to strategically invest for the future growth of the organisation," said Partha DeSarkar, Global CEO, HGS.   We see a long-term value and benefit to HGS in doing so. HGS will continue to focus on aggressively expanding its CES and Digital businesses in line with our goal to transform itself into a ‘digitally-enabled customer experience (CX) company," he added.   The Hinduja Group owns businesses in Automotive, Information Technology, Media, Entertainment & Communications, Banking & Finance Services, Infrastructure Project Development, Cyber Security, Oil and Specialty Chemicals, Power, Real Estate, Trading and Healthcare.