5Paisa shares plunge 15% in 5 days. Should you buy?1 min read . Updated: 21 Oct 2021, 11:09 AM IST
- Being a new age fintech broker, ICICI Securities has retained its Buy recommendation on 5Paisa shares
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Shares of 5Paisa Capital plunged over 2% to ₹438 per share on the BSE in Thursday's early deals after the company reported a mix set of earnings for the second quarter ended September (Q2FY22). 5Paisa is a leading discount stock broker backed by the Nirmal Jain-led IIFL group. The stock has plunged around 15% in 5 days, however, 45% in year-to-date terms.
Being a new age fintech broker, the brokerage firm ICICI Securities has retained its Buy rating on healthy client accretion and gradual uptick in profit after tax (PAT). It has a target price of ₹530 per share with a time period of around twelve months.
5Paisa has an aggressive client accretion with around 84% of incremental client from Tier II & below cities and around 78% of customers below 35 years of age, the brokerage note stated. Its ADTO (Average Daily Turnover) was up 40% on a sequential basis in the quarter ended September amid robust client accretion at 3.42 lakh.
Focus on aggressive client accretion to aid ADTO and thereby topline and revamp of existing product suite, new product launch, improvement in technology & branding to support incremental accretion to act as key triggers for future price performance, ICICI Securities said.
Client addition to aid earnings growth and return ratios, elevated marketing & tech spends may lead to gradual uptick in earnings, and higher client engagement to improve activation is the key ahead to also act as key triggers for future price performance of 5Paisa.
Apart from 5 Paisa, in its coverage, ICICI Securities also likes MCX on being a leader in commodity derivative exchanges in India with around 94% market share in commodities future space as on FY21. Its Buy rating on MCX comes with target price of ₹2,000.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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