₹553 to ₹715: Aditya Birla Money sees 30% upside in multibagger stock despite 2,650% rally in five years

Small-cap multibagger stock Jash Engineering, engaged in water and wastewater management, has a strong runway for growth despite a sharp rally over the past few years, believe analysts at Aditya Birla Money.

The brokerage has initiated coverage on Jash Engineering with a 'buy' rating and a target price of ₹715, signaling 30% upside from current levels, driven by strong revenue potential, expansion into global markets, product diversification, and consistently improving ROEs and ROCEs.

"We expect Jash to achieve a 17%/17%/19% CAGR in revenue, EBITDA, and PAT and initiate coverage with a buy rating and a target price of ₹715, valuing the stock at 35x FY27E EPS, the brokerage said.

Jash Engineering share price trend

The strong views by the brokerage come despite the multibagger returns offered by the company. Jash Engineering's share price has rallied from ₹19.60 five years ago to ₹553 currently, delivering 2,647.65% returns to its investors during this period.

In the near term, too, the smallcap stock' performance has been impressive, with the scrip rising 6% in just one month and over 60% in the past one year.

Key reasons behind Aditya Birla Money's bullishness

Here are the key reasons behind the brokerage's bullish views:

Strong revenue potential

Jash Engineering is targeting revenue to reach ₹1,000 crore by FY27, which the brokerage said will be driven by manufacturing expansion.

The company has plans to commission three new plants between FY25 and FY27 and has recently entered the UK market, which is expected to contribute to a revenue increase from ₹620 crore to ₹750 crore by FY26. Additionally, the company is set to open a new facility in Chennai by Apr 2025, setting it up for sustained growth, with expected revenue CAGR of 15-20% through FY28.

Global expansion plans

Jash Engineering generates a large chunk of its revenue from outside of India as it exports to 45 countries, and focuses on high-potential English-speaking markets worth ₹10,000-11,000 crore.

It aims to raise export revenue to 65% by FY27/FY28 from 60% in FY24. As of March 1, 2025, its order book was worth ₹918 crore, with ₹330 crore from India and ₹588 crore internationally.

"With the global water and wastewater market set to grow at 7.5% annually, reaching $617 billion by 2032, with the US alone contributing $314 billion, Jash is well-positioned to capitalise on this opportunity," the brokerage said.

Scope for domestic expansion

Back home, the company dominates India’s water control gate market with a market share of 60-70%. With cities like Surat leading in wastewater processing, there is significant untapped growth potential in major metros such as Delhi and Mumbai, where wastewater treatment infrastructure lags, the brokerage said.

The company's expertise, favourable government spending in India and increasingly stringent environmental regulations position it to gain from the growing demand for water treatment solutions both domestically and internationally, it opined.

The company has several major clients like Va Tech Wabag, NTPC, BHEL, Reliance, L&T, and Adani.

Operational efficiency

Jash has consistently improved its ROE and ROCE by efficiently allocating and utilising funds, particularly through strategic acquisitions. "The successful ramp-up of its business has led to steady improvements in these key financial metrics. We expect this trend to continue as the company grows. Over the past four years, Jash has maintained an average ROE and ROCE of over 20%, reinforcing its financial strength and operational efficiency," as per the brokerage.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.