Buy Share India Securities; target of Rs 395: Khambatta Securities

Khambatta Securities' research report on Share India Securities

Share India Securities Limited (SIS) is a new-age financial service provider offering bespoke capital market solutions by leveraging technology. The company is present across the broking, trading, NBFC, wealth management, insurance broking and merchant banking verticals. Leveraging its expertise in quant trading strategies, SIS’s prop trading operations contributes over three-fourths of its revenues. The company employs arbitrage strategies, quant trading tools and jobbing/highfrequency trading (HFT) in its prop trading operations while specialising in low-latency algo trades. SIS acquired a leading stock broking company, Total Securities Limited (TSL) in December 2019. The merger resulted in an immediate growth spurt, an increase in financial robustness, synergies from the application of TSL’s trading strategies to SIS’s technology platform, and generation of benefits such as geographical expansion of operations, cost reduction, and strengthening of leadership.

Outlook

The SIS stock currently trades at an attractive forward P/E level of 9.0 FY23E EPS. Assigning a target multiple of 12.0x FY23E EPS, our valuation generates a price target of ₹395, informing a BUY rating with an upside potential of 34%.