Midcap Exclusive research report Nagreeka capital

Equity99 research report on Nagreeka Capital and Infrastructure 

Nagreeka Capital and Infrastructure ltd. (NAGREEKCAP), incorporated in 1994, is a part of Nagreeka Group, founded by Mr. I. L. Patwari and his family. Under the leadership of Mr.  Sushil  Patwari, Chairman, NAGREEKCAP is engaged in the activity of securities sale.

NAGREEKCAP is designated as a non-banking financial company (NBFC). Its business includes investment in shares, securities and units of mutual funds.

NAGREEKCAP’s portfolio consists of investments in equity markets, private equity, capital ventures, mutual funds, real estate and renewable energy, among others.

NAGREEKCAP’s management expects acceleration in growth trend in 2017-18, based on declining inflation, lower interest rates and continued focus on economic reforms by way of introduction of GST, Digitalization and expected strengthening of Indian Rupee.

With Sensex and Nifty touching new highs, there is big increase inflow of funds into markets from foreign and Indian funds has kept demand for Indian equity and debt very bullish and this is expected to continue optimistically. This will result in higher investment opportunities in Indian Capital Markets, thus benefitting NAGREEKCAP.

In Q2FY18, NAGREEKCAP’s Total Revenues grew by 115% on QoQ basis to 453 Mn., EBITDA grew 51% QoQ to Rs. 47 Mn., PAT zoomed by 252% QoQ to Rs. 13 Mn. and EPS surged by 253% QoQ to Rs. 1.06.

On Full year basis. NAGREEKCAP’s performance was commendable. However, it reported Net losses due to tax expenses. As we can see via results, NAGREEKCAP is undergoing a turnaround phase and going ahead, strong performance can be seen.

AT CMP of Rs. 39.20, the stock is trading at PE of 7.8x on its EPS (TTM) of Rs. 5.03 per share. The stock is available at a discount if we compare it with Industry PE (PE 44.2x), S&P BSE SmallCap (PE 87.8x) and Nifty SmallCap 250 (PE 86.4x); we recommend a strong BUY to our investors for long term Multi-bagger returns.

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