Vakrangee Ltd. share price target

Vakrangee Ltd Q2FY18 results comment Revenue rose by 19.12% to Rs. 1550.79 Cr in Q2FY18 when compared to the previous quarter. Also, it rose by 61.7% when compared with Q2FY17.

PAT increased by 38.3% YoY on strong revenue growth: During Q1FY18,the revenue stood at Rs. 13047 Mn as against Rs. 9183 Mn for the corresponding quarter last year, registering a YoY growth of 42.1%.

Expecting huge growth with Asset Light model: The company is focusing more on asset light model like Vakrangee Kendras from capital intensive E-Governance vertical. Hence, the capex and working capital requirements of thecompany are going to be reduced. Revenue of Vakrangee has grown with a CAGR of 26.8% and PAT by 50.2% from FY13-FY17. During FY17, the revenue grown by 25.4% and net profit rose by 34.5% to Rs. 5308 Mn over revenue of Rs. 40005 Mn.

Vakrangee Limited (VL) is a e-Governance company in India with about 20 years of experience in delivering system integration and other services for India's national e-governance plan. VL is a technology enabled company and has built up an extensive delivery network for its services across selected regions in northern and western India. VL's business is broadly divided into the following two business segments: (i) e-Governance Business, including systems integration projects and print and data management services; (ii) Vakrangee Mart Business, which includes Financial Inclusion Business, G2C & B2C...

Revenue grew by 2.07% to Rs. 978.86 Cr in Q3FY17 when compared to the previous quarter. Also, it rose by 19.54% when compared with Q3FY16.

Company to shift its focus from e-governance business to financial inclusion business: VKI has evolved over the past 2 decades transforming from a sub-contractor and IT enabler for E-governance projects to taking on projects on its own. E-governance projects are capital intensive with low RoA, management gradually shifted focus to high-growth opportunities in financial inclusion and E-commerce. The Vakrangee Kendra and the White Label ATM businesses will help the company reduce its reliance on short-term project-based revenues and cash flows from e-Governance projects and ontinue generating incremental stable revenues, cash flows over a longer period of time. We expect the revenuesto increase by CAGR of 17% from FY15-17E.