Buy Infibeam Avenues; target of Rs 37.6: KR Choksey

KR Choksey's research report on Infibeam Avenues

Infibeam Avenues reported mixed results with profits beating our estimates despite being a miss on the top line. Revenue increased 11.4% YoY to INR 7,269 Mn due to strong growth in Transaction Processing Value (TPV) to INR 2,266 Bn in Q4FY24 (+53.0% YoY) followed by an improvement in Net Take Rate (NTR) to 9.2 bps from 9.0 bps. EBIT grew 43.7% YoY to INR 482 Mn due to strong top-line growth aided by lower opex, lower employee expense, and lower other expenses partially offset by higher depreciation costs, as a result, EBIT Margins improved to 6.6% (+149 bps YoY). PAT jumped 28.1% YoY to INR 492 Mn aided by lower taxes, as a result PAT Margins improved to 6.8% (+89 bps YoY). Infibeam Avenues plans international expansion and increased offline presence in India, targeting double-digit NTR by FY25E. We adjust our EV/Sales multiple to 1.8x but lower our target price to INR 37.6/share on a slight delay in execution. However, we retain our “BUY” rating on Infibeam Avenues as recent expansion plans offer robust growth prospects.

Outlook

Consequently, we also lower our target price to INR 37.6 (from INR 41.7), indicating a 17.2% upside from current levels. We maintain our "BUY" rating for Infibeam Avenues, as the Company is poised for significant growth, driven by recent acquisitions, international opportunities and new offerings

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