Choice sees nearly 68% potential upside in this smallcap stock

Choice Institutional Equities has initiated coverage on Aurionpro Solutions Ltd, highlighting a potential upside of around 68 per cent from current levels, driven by the company's transition to an IP-led, product-first technology model and improving growth visibility.

Choice assigned a 'Buy' rating on the smallcap stock with a target price of Rs 1,880, implying an upside of 67.71 per cent from Wednesday's closing price of Rs 1,121.

The domestic brokerage noted that the company has sharpened its focus on high-growth areas such as digital banking, lending automation, payments, transit solutions and data centre-related technologies, while divesting non-core businesses.

Choice highlighted Aurionpro's dual-engine business model, with banking and fintech contributing a majority share of revenues and the Technology Innovation Group providing diversification through transit automation and data centre solutions. It pointed out that this mix offers better revenue visibility and supports margin stability, aided by a growing order book of over Rs 1,300 crore.

On the financial front, the brokerage expects strong earnings momentum over the medium term. Choice projects revenue, EBITDA and profit after tax (PAT) to grow at a compounded annual rate of 29.8 per cent, 31.7 per cent and 29 per cent, respectively, between FY25 and FY28, supported by higher contribution from IP-led platforms and recurring revenue streams. At the current levels, Aurionpro is seen trading at relatively lower valuation multiples compared with other high-growth enterprise software peers.

Choice also noted that partnerships with global fintech players and targeted acquisitions have strengthened Aurionpro's international presence.

However, the brokerage flagged execution risks, including delays in government-linked projects, slower global scale-up and policy-related uncertainties, which could impact near-term performance.