This smallcap stock surged 26% in 4 days; this brokerage expects 48% upside

Genesys International continued its upward movement for the fourth straight day, hitting a new high of Rs 924.80, and gaining 5 per cent on the BSE in Wednesday's intra-day deal.

Shares of Genesys International continued their upward movement for the fourth straight day, hitting a new high of Rs 924.80, gaining 5 per cent on the BSE in Wednesday’s intra-day deals. 

 

In the past four days, the stock of this smallcap information technology (IT) enabled services company has surged 26 per cent after Elara Capital initiated coverage on Genesys with a 'Buy' rating, citing that the stock trades at an attractive valuation. The brokerage set a price target of Rs 1,370 per share.

 

Genesys International is a leading geospatial solutions provider in India, known for its expertise in high-precision 3D Digital Twin mapping and LiDAR-based GIS platforms. Genesys offers advanced mapping and spatial analysis solutions that support a wide range of industries, including urban planning, transportation, and environmental monitoring.

 

 

In little more than 12 months, the market price of Genesys International has zoomed 204 per cent from a level of Rs 304.35 on November 8, 2023.

 

In the past one month, the stock rallied 37 per cent after the company reported consolidated profit after tax of Rs 11.23 crore in September quarter (Q2FY25). It had posted loss of Rs 3.3 crore in Q2FY24. Earnings before interest, tax, depreciation and amortization (ebitda) increased to Rs 30.38 crore from Rs 8.82 crore; margin improved to 41.6 per cent from 25.7 per cent in Q2FY24 and 38.17 per cent in Q1FY25. Total revenue grew 113 per cent year-on-year at Rs 73.02 crore against Rs 34.29 crore in a year ago quarter.

 

The management said the quarter’s performance reflects the impact of the investments made in the New India map stack. Several cities have begun adoption of the company’s digital twin solutions and the management expects to gain significant traction in the same given the marquee status of the cities that the company is working in.

 

Genesys International is a dominant player in India’s rapidly growing geospatial sector, driven by transformative government initiatives, such as the National Geospatial Policy 2022 and PM Gati Shakti. The company’s leadership in 3D Digital Twin technology, AI-driven mapping, and real-time data analytics has enabled it to secure high value contracts, such as NEOM City and the Mumbai 3D City Model.

 

With an Rs 390 crore orderbook and an additional Rs 2,400 crore qualified pipeline, Genesys International is positioned to capitalize on India’s projected Rs 29,300 crore geospatial market by CY30E. Its cutting-edge solutions, the new India map stack, with industry-leading accuracy aligning with rising demand for Smart City and infrastructure projects, solidifying its market advantage. Despite its superior technological positioning and robust growth prospects, the company trades at an attractive valuation of 10.2x FY27E EV/EBITDA and 20.5x FY27E P/E, analysts at Elara Captial said in initiate coverage report dated November 25.

 

The company is well positioned to capitalize on India’s expanding geospatial market, which is projected to total addressable market (TAM) of Rs 31,400 crore by CY30E, fueled by policies and impetus on adopting geospatial markets in India and the Middle East. 

 

Further, strategic collaboration with the Survey of India and Saudi Arabia’s General Authority for Survey and Geospatial Information (GEOSA) have enabled Genesys International to secure marquee projects, such as NEOM City and the Mumbai 3D City Model, reinforcing its leadership in Smart City development, urban infrastructure, and national digital initiatives, the brokerage firm said.

 

However, investors should note risks related to high working capital days, dependency on government projects, and customer concentration, which management is actively addressing through diversification strategies, it added.

 

As on September 30, 2024, the promoters held 37.34 per cent stake in Genesys International. Resident individual investors held 43.18 per cent holding in the company, while, foreign institutions held 7.97 per cent stake, the shareholding pattern data shows.