Accelya Kale with NewManagement in for a Re-rating
Growth prospects, strong dividend payouts to also help the re-rating in the coming quarters
Mumbai: The IT sector could be facing an uncertain future, with protectionist policies in the West clouding its growth prospects, but shares of Accelya Kale Solutions, a leading solutions provider to the airline and travel industry, could see a sharp upward re-rating due to growing business and change in management, say analysts.
The stock of Accelya Kale appreciated as much as 16% on Monday to hit a 52-week high before closing at ₹ 1,688.10, up 5%, following the disclosure on Saturday that private equity firm Warburg Pincus would become the majority shareholder in the company after its acquisition of parent Accelya from Chequers Capital. The stock has rallied 17% so far this year.
“Shares of Accelya Kale, a key beneficiary of favourable macros in the aviation sector, could see a sharp rerating in the coming months due to its growth potential, solid dividend payout history and change in management,” said Kush Katakia, CEO, Beanstalk Advisory. Warburg Pincus, which acquired Accelya and Mercator, a global provider of product-enabled solutions to the travel and transportation industry, has announced its intention to combine the two, creating a global technology-enabled solutions provider to airlines, travel agents and freight forwarders. The company has reported a 16% rise in turnover at ₹ 92.8 crore for the quarter ended September 2016 and a 48% jump in net profit at ₹ 24.4 crore. Foreign promotors owned 74.66% stake in the company, while SBI Mutual Fund held 2.83%, as on December 31, 2016.
The company has paid 2235% divi- dend in the last five years.
Accelya helps airline and travel companies manage their financial processes and gain insights into gather business.
Growing air traffic, aided by lower crude oil prices, augurs well for niche airline solutions providers like Accelya Kale Solutions, said industry analysts.
IN THE MAKING
“Accelya is one of the few companies that offered very high dividend payout, of about 80%, in the last five years, a much better return ratio t han o t her c o mpanies,” s a i d Deepak Purswani, analyst, ICICI Securities.
“Accelya is the only niche pure-play IT company in airline solutions, which had better visibility in terms of earnings growth of about 15% during FY15-18 on the back of better client penetration and a favourable macro scenario for the aviation industry,” he added.