Elara Capital’s latest stock recommendation involves India’s leading geospatial player with a massive 81% upside. The brokerage house has selected the company on the basis of cutting-edge 3D mapping technology and smart city solutions. Read on for more.
The stock in question is Genesys International which closed at INR 758 per share on 22 November 2024 – the date of writing the research note. The brokerage house has put a target of INR 1,370 per share on the stock, implying an upside of 81%. Following the Buy recommendation, the stock has already moved up to INR 822 per share, closing the gap with Elara’s target.
The Big Picture: A Booming Industry
With government initiatives like the National Geospatial Policy 2022 and PM Gati Shakti paving the way, India’s geospatial sector is projected to hit an impressive INR 29,300 crore market size by FY 2030. Against this backdrop, the company has firmly positioned itself at the forefront, leveraging its expertise in 3D mapping and real-time analytics to secure lucrative projects such as NEOM City and Mumbai’s 3D City Model.
Armed with an order book worth INR 390 crore and a massive INR 2,400 crore qualified pipeline, this player is primed to dominate both domestic and international markets. Its leadership in smart city development and critical infrastructure mapping underscores its pivotal role in India’s digital transformation.
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Financial Fireworks: A Stock with Explosive Growth
Investors have every reason to keep a close watch on Genesys International. The company is projected to achieve a revenue CAGR of 54% and a staggering PAT CAGR of 89% between FY 2024 and FY 2027. Its revenue is expected to soar from INR 181.3 crore in FY 2023 to an impressive INR 722.4 crore by FY 2027, with EBITDA margins climbing to a solid 40.4%.
The growth potential stems from its ability to secure high-value contracts while scaling innovative solutions for infrastructure and urban development.
Tech-Savvy Strategy Meets Global Opportunity
The company’s technological edge lies in its proprietary Oyster 3D Maps platform, which boasts an industry-leading accuracy of 5cm. The company utilizes advanced techniques such as LiDAR, aerial surveys, and photogrammetry to create high-definition maps. This expertise has won it high-profile projects, including digital twin initiatives and large-scale infrastructure mapping, solidifying its competitive advantage both in India and abroad.
Genesys has pioneered the creation of 3D city digital twins, which are used for urban governance, disaster management, and infrastructure optimization. These digital twins integrate various data layers to enhance public service delivery. As a result, strategic partnerships with international organizations like Saudi Arabia’s General Authority for Survey and Geospatial Information (GEOSA) have further bolstered its global presence. These collaborations, coupled with India’s booming smart city projects, place the company in an enviable position to ride the geospatial growth wave.
Established in 1995 and headquartered in Mumbai, India, the company boasts a workforce of over 2,000 professionals with extensive experience in Geographical Information Systems (GIS) and Geospatial Engineering.
What’s the Catch?
While the prospects are exciting, investors should note potential risks, including high working capital demands and reliance on government projects. One such point to note is the declining stake of promoters in the company. As of March 2020, the promoters enjoyed equity stake of 48.13% in the company but the same declined to 37.33% as of 30 September 2024. Promoters cashing out of the business is generally viewed as a negative factor.
Why It Matters?
The geospatial market is on the cusp of a revolution, with a projected total addressable market of INR 314 billion by FY30. As urbanization accelerates and digital infrastructure takes center stage, this emerging leader is set to deliver cutting-edge solutions that will define India’s transformation.
For investors seeking the next big opportunity in India’s tech-driven future, this 81% upside story of Geospatial player could be too compelling to ignore.
