CMS Info systems:
I have recently entered the stock based on technical formations as explained in the chart. Apart from this fundamentally a decent bet.
Expectations technically:
- IPO base breakout (typically after the IPO base breakout the moves are swift)
- Charts point to 325/335 as first target based on charts and if this is sustained first, it’s blue sky scenario.
- Visual patterns, price action, volumes are priority in my technical bets + decent fundamentals.
Box breakout are reliable as stock consolidates for fundamentals to catch up & when there is sufficient evidence of this, stock moves out of the box for next technical formation.
Fundamentally,
The management is talking about 18% CAGR growth which may be ambitious given the sector the company is in however, there are tailwinds like
- Banking sector growth
- Formal economy, Retail penetration
- Banks outsourcing cash management to third party vendors.
Valuations are quite low at FY24E PE of 14 (probably because of low growth expectations of market). However, Low debt, 20% ROE, Leadership position, managed services & new businesses growth, 25% dividend distribution as alluded by management may be the factors for re-rating.
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