Hold Datamatics Global Services; target of Rs 610: Choice Equity Broking

Choice Equity Broking's report on Datamatics Global Services

Revenue for Q3FY25 came at INR 4.2Bn up 15.2% YoY and 4.6% QoQ (vs CEBPL est. at INR 4.1Bn). EBIT for Q3FY25 came at INR 0.4Bn, up 2.3% YoY and 13.7% QoQ (vs CEBPL est. at INR 0.6Bn). EBIT margin was down 133bps YoY but up 84bps QoQ to 10.5% (vs CEBPL est. at 14.6%). PAT for Q3FY25 stood at INR 0.7Bn, up 80.0% YoY and 75.4% QoQ (vs CEBPL est. at INR 0.6Bn).

Outlook

We value DATA at a PE multiple of 14x (no change) implying target price of INR610 based on FY27E EPS of INR 43.5. DATA is a potential candidate for rerating if company meets industry matching sales growth, margin expansion with successful acquisition integration & no further dilution of promoter stakes.

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