Geojit reported a healthy performance on all fronts. Total revenue was up 22.9% to Rs. 91.1 crore, on the back of robust increase in cash average daily turnover (ADTO) thereby, improving yields. Healthy topline & steady opex led to strong PAT growth of 669% YoY & 38% QoQ to Rs. 23.8 crore.
Valuation & Outlook
Geojit remains a small player in terms of clientele with acquisition pace lagging behind large peers. However, in the current scenario witnessing higher volume in cash segment, GFS remains a clear beneficiary given largest proportion of cash business. Continued focus on targeting middle, upper middle-class customers and engaging in personalised service would enable better stickiness. Continued focus on cash ADTO is seen keeping yields elevated. Harnessing client relationship, distribution of financial products remains one of the focus areas seen to garner fee income (expect growth to stay subdued in FY21E due to lockdown). Expect steady growth in ADTO at Rs. 2413 crore coupled with higher proportion of cash business at Rs. 613 crore to support traction in revenue. We expect earnings to grow at 24% CAGR in FY21-22E to Rs. 77.8 crore. Given higher proportion of cash business that is positive in current scenario, we revise our target price to Rs. 46, valuing the company at 14x FY22E EPS. We upgrade from HOLD to BUY.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Geojit_Q1FY21.pdf
Shares of Geojit Financial Services Ltd was last trading in BSE at Rs.40.05 as compared to the previous close of Rs. 41.4. The total number of shares traded during the day was 92619 in over 905 trades.
The stock hit an intraday high of Rs. 41.8 and intraday low of 39.7. The net turnover during the day was Rs. 3727586.