Accelya Solutions - Q4FY20 Company Update - ICICI Securities

Accelya reported dismal Q4FY20 (June ending) results mainly led by exposure to airline sector. Revenues fell 44.7% QoQ, 42.4% YoY to Rs. 62.8 crore. EBIT margins were at 4.5% vs. 28.9% in Q3FY20. PAT declined 85.0% QoQ to Rs. 3.6 crore. Due to challenging times, the company has not declared a dividend and will conserve cash.

Valuation & Outlook

The company reported a subdued Q4FY20 performance. However, we expect Accelya to witness improved revenues on a QoQ basis based on a gradual opening up of economies and improved volumes in June 2020 vs. April & May 2020. Further, we expect a healthy recovery in the airline sector coupled with cross selling opportunities from Fairlogix to drive FY22E revenues (up 19% YoY). In addition, we expect margins to witness a healthy improvement in FY22E based on cost rationalisation and improvement in revenues. As a result, we revise our EPS estimates upwards from Rs. 38 and 53 in FY21E & FY22E to Rs. 45 and Rs. 69 in FY21E & FY22E, respectively. Hence, we revise our target price upwards to Rs. 1200/ share (17x FY22E EPS, 3.5x FY22E sales) and upgrade the stock from REDUCE to BUY recommendation.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Accelya_CoUpdate_Aug20.pdf

Shares of Accelya Solutions India Limited was last trading in BSE at Rs.1039.05 as compared to the previous close of Rs. 1044.55. The total number of shares traded during the day was 2059 in over 317 trades.

The stock hit an intraday high of Rs. 1059 and intraday low of 1029. The net turnover during the day was Rs. 2143443.

Source : Equity Bulls

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