Hold Accelya Solutions, target price Rs 1070: ICICI Direct

ICICI Direct has given a hold rating to Accelya Solutions with a target price of Rs 1070. The share price moved down by 0.74 per cent from its previous close of Rs 959.15. The stock’s last traded price is Rs 952.10.

Accelya Solutions India Ltd., incorporated in the year 1986, is a Small Cap company (having a market cap of Rs 1418.59 Crore) operating in IT Software sector.

Accelya Solutions India Ltd. key Products/Revenue Segments include Software Development Charges which contributed Rs 336.70 Crore to Sales Value (94.85 % of Total Sales) and Other Operating Revenue which contributed Rs 18.28 Crore to Sales Value (5.14 % of Total Sales)for the year ending 30-Jun-2020.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 59.22 Crore, down 5.14 % from last quarter Sales of Rs 62.43 Crore and down -51.37 % from last year same quarter Sales of Rs 121.78 Crore Company reported net profit after tax of Rs 2.05 Crore in latest quarter.

Investment Rationale
The company reported a subdued Q1FY21 performance. Further, the brokerage expects its ability to reach pre-Covid levels to be further elongated by a few quarters due to fresh lockdowns announced in many countries and Covid related challenges in airline sector. As a result, it tapers down FY21E and FY22E revenue and EPS estimates. Hence, it revises target price downwards to Rs 1070/ share (17x FY23E EPS, 3.5x FY23E sales) and downgrade the stock from BUY to HOLD recommendation.