Elara Capital sees over 104% upside in THIS mid-cap IT stock, shares rationale

Elara Capital has stayed bullish on a mid-cap IT player specialising in geospatial solutions even as it reduced the target price. The domestic brokerage has assigned a target price of Rs 940 for Genesys International Corporation Ltd, implying a potential upside of 104.13 per cent from Wednesday's closing level of Rs 460.50. The stock has corrected 53.09 per cent year-to-date (YTD) but remains a massive 934.83 per cent gainer over the last five years.

Elara's optimism comes despite the company delivering, what the brokerage termed a muted performance for the September quarter (Q2) of FY26. According to Elara, the company fell short of expectations on multiple operating metrics as cost pressures continued to run ahead of revenue recognition.

For Q2 FY26, consolidated revenue increased 6.8 per cent YoY and 8.6 per cent QoQ to Rs 76.9 crore, which was around 10 per cent below estimates. EBITDA stood at Rs 30 crore, rising 2.1 per cent YoY and 1.7 per cent sequentially, but still 20 per cent below expectations. Margins contracted sharply, dropping 181 basis points (bps) YoY and 264 bps QoQ to 39.0 per cent, primarily due to higher staffing and operating expenses.

Profit before tax (PBT) came in at Rs 1.5 crore, down 7 per cent YoY, while profit after tax (PAT) rose 8.7 per cent YoY to Rs 12.1 crore, aided by higher other income and a lower effective tax rate. Factoring in the higher cost of equity (COE) and continued volatility in execution cycles, Elara reduced its DCF-based target price to Rs 940 (from Rs 1,310 earlier), while maintaining a 'Buy' rating.

The brokerage highlighted that the company's Qualified Institutional Placement (QIP) utilisation remains fully in line with stated objectives, with around Rs 27.4 crore deployed to date, while the remaining funds are placed in interest-earning fixed deposits.

A key positive for the quarter came from a multi-year contract with Tata Motors Passenger Vehicles. Under this agreement, Genesys will supply standard-definition navigation maps and ADAS-ready high-definition maps for Tata's software-defined vehicle platform.

The per-vehicle, license-fee structure provides a scalable annuity revenue stream. While near-term revenue contribution is expected to be limited, Elara believes this win significantly strengthens the company's credibility in automotive-grade mapping and supports its long-term connected mobility roadmap.