Ac­celya Kale with NewMan­age­ment in for a Re-rat­ing

Growth prospects, strong div­i­dend pay­outs to also help the re-rat­ing in the com­ing quar­ters

The Economic Times - - Smart -

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.

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