4,500% return in 75 months! ProfitMart sees more upside in this multibagger stock

Domestic brokerage firm ProfitMart Securities continue to remain positive Share India Securities Ltd and see another 25 per cent upside in the counter. Interestingly, the broking and stock market solution provider has delivered about 4,500 per cent returns from its issue price in September 2017.

Share India Securities is a financial service provider that uses technology to offer customized capital market tech-based solutions to clients. It offers financial products & personalized services, including equity broking, currency & commodity derivative, depository participant services, mutual fund advisory and distributorship and more to retail and corporate clients.

It has diversified its businesses and created verticals of growth by venturing into NBFC, insurance broking, wealth management, and merchant banking. It has 10 subsidiaries which roughly contributed 25 per cent to its total revenue and 31 per cent to its profitability as of FY23. It has an active client base of 31,063 in the broking business and 67,629 clients in the NBFC segment.

Shares of Shares India Securities rose Rs 1882.65 on Monday, hitting its new 52-week high and the company's total market capitalization topped Rs 6,100 crore mark. Share India Securities has delivered a return of 55 per cent in the last one year, while the stock is up a whopping 975 per cent in the last three-year period.

Shares India Securities launched its IPO in September 2017, when the company raised a total of Rs 26.37 crore via its IPO by selling its shares for Rs 41 apiece, with a lot size of 3,000 equity shares. The company was listed on the SME platform of BSE but was later migrated to the mainboard of the exchange in 2020.

A single lot during the IPO of the company was worth Rs 1.23 lakh and the same number of shares are worth Rs 56.5 lakh. It means that investors have reaped 45 times profit from a single lot of Share India Securities, as the stock hit new highs of Rs 1882.65 on Monday, January 1.

Share India plans to focus to continue on strengthening technological investment to roll out more tech-based retail solutions and innovative products. The company management expects the retail broking business to contribute significantly to the overall revenue mix going ahead, said ProfitMart Securities.

"In the last couple of years, the company has acquired two Algo based trading platforms company (uTrade and Algo Wire), and both these acquisition synergies have gone well and its products have received good response," it added. "It recently announced the acquisition of Silverleaf Capital Services, which is a player involved in trading activities in the areas of high-frequency trading."

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Share India currently holds approximately 5 per cent market share in option trading, with an average daily turnover of Rs 114 billion across all market segments Share India's extensive network encompasses 143 broking branches and franchisees, along with 52 NBFC branches.

On a rough cut basis, in FY24E, Topline is expected to touch Rs 1,479 crore, followed by Rs 1,849 crore in FY25E and Rs 2,218 crore in FY26, said ProfitMart. On the bottomline level we expect the company to record a PAT of Rs 450 crore in FY24E which is expected to bounce back to Rs 550 crore in FY25 & Rs 675 crore in FY26, it said.

On a conservative basis, Share India should record a EPS of Rs 136.36 for FY24E which is expected at Rs 166.67 for FY25E and Rs 204.55 for FY26E, it added. "Looking at Share India’s steady financial track record, strong product portfolio and unique offerings and strong promoters we expect the stock to get re-rated in future," it said with a target price of Rs 2,400 in 18 months.

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