Buy Accelya Kale; target of Rs 1106:Karvy

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Karvy's research report on Accelya KaleRevenue grew at a CAGR of 8.2% during FY11-FY15, and we expect the revenue would further grow by 6.9% CAGR during FY15-FY17E, on the back of increasing passenger / air cargo traffic volumes and strengthening airline industry. Post acquisition in FY11, Kale consultants became a part of Accelya group. Revenue is primarily derived from transaction processing, sale of software services, related implementation and maintenance services, we expect transaction based model (airline ticket and coupon processing) would contribute the major revenue growth further, on the back of increase in passenger / air cargo traffic volumes which would uplift the transactions and drive the revenue growth. At CMP of Rs.941, the stock is trading at P/E of 19.2x and 17.2x of FY16E and FY17E EPS respectively. We initiate coverage on “Accelya Kale solutions Ltd” with a “BUY” recommendation with a target price of Rs.1106 representing an upside potential of 18% for a 9-12 month period. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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