RateGain - Sustained Organic Growth, Attractive Valuation; Maintaining A 'Buy': Anand Rathi

Anand Rathi Report

RateGain Travel Technologies Ltd. stock saw six months of consolidation due to acquisition overhang (~Rs 6 billion raised via QIP in Nov-23), slowdown in the distribution segment (owing to contract renegotiations) and promoter stake sale.

We expect ~20-22% YoY organic growth, with ~150-200 bp margin expansion ahead (FY24 margin ~19.8%), supported by a pick-up in the distribution segment (the segment is expected to report double-digit growth due to decent contract wins) and continued focus on scaling up of existing products.

Further, the company is actively looking at inorganic opportunities. Factoring this, we largely maintain our FY25e/26e and introduce our FY27e.

We retain a Buy, with a 12-month Rs 1,050 target price (earlier Rs 935), 36 times FY27e earnings (45 times FY26e earnings).

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