This stock will give a strong return of 60%, brokerage has started coverage, know TGT

Stock to Buy: The market has been on a bullish trend for the last 12 trading sessions. Moody's has raised the growth forecast for the Indian economy. The market is expected to remain bullish going forward and there will be stock specific action. Brokerage house Monarch Networth Capital has initiated coverage on diversified commercial services company Krystal Integrated Services. Investors can get 60 percent return in this.

Brokerage Monarch Networth Capital has recommended buying Krystal Integrated Services. The brokerage has set the target price at Rs 1,230 per share. On August 30, the stock closed at Rs 772.35. The stock can rise by 60 percent from this price.

According to the brokerage, Krystal is the fastest growing in the IFMS industry, offering a diverse range of services including IFMS, private security, staffing and catering. With a revenue CAGR of 30% over FY21-24, Krystal has outpaced its competitors, driven by its ability to deliver customized solutions backed by strong management. Krystal's strategic focus on key sectors through government contracts, exceptional service portfolio and strong leadership keep it ahead of its competitors. Additionally, the company can explore opportunities in the B2C segment by leveraging its expertise and brand recognition for future growth.

The brokerage says that Krystal has strategically grown its customer base from 262 in FY21 to 369 in FY24 and has a contract renewal/extension retention rate of 100% in FY2024. The brokerage believes that revenue is expected to grow at 23% CAGR during FY24-FY27, driven by an increase in customers as well as an increase in government contracts. We expect EBITDA margin to expand by 110 basis points to 7.8% over the same period, driven by improved operational efficiency and EBITDA CAGR of 29.3% and PAT CAGR of 34.7% during FY24-FY27E.

What does the company do?

Krystal Integrated Services operates on a B2B model. It provides services such as housekeeping, sanitation, landscaping, gardening, mechanical, electrical, plumbing, waste management, pest control, facade cleaning as well as services such as production support, warehouse management, airport management. The company also offers staffing, payroll management, private security, catering services.