Stock to buy for long-term: Experts see 67% upside in this small-cap stock. Buy or avoid?

Trading nearly 27 per cent lower from their 52-week high, shares of small-cap company Krystal Integrated are poised for a turnaround, as per experts. Given focus on key sectors through government contracts, diverse revenue streams and strong financial performance, analysts are hopeful of up to 67 per cent rally in Krystal Integarted’s share price in the long run.

The firm which debuted on the stock exchanges in March of this year is currently trading below its listing price of ₹785 on NSE although it is still up over the IPO price of ₹715. The stock is currently hovering at around ₹750 levels on the NSE.

Both technical and fundamental factors signal the scope of strong gains for the stock.

Tech View

As per Sumeet Bagadia, Executive Director at Choice Broking, Krystal Integrated Services shares have made a strong base at ₹700 apiece mark with the small-cap stock facing a hurdle at ₹800 to ₹850 range. Bagadia believes a breach of this resistance can lead to a sharp upside in the counter.

“On breaching above this resistance on a decisive basis, we can expect sharp upside movement in this scrip. Those with this stock in their portfolio are advised to hold the scrip with strict stop loss at ₹700 for the short-term targets of ₹800 and ₹850. One can add more on big dips; the unit ₹700 stop loss remains sacrosanct. Fresh investors can also maintain the buy-and-hold strategy,” Bagadia suggested.

Fundamental View

Recently, brokerage Monarch Capital initiated coverage on the stock with a BUY rating and a target price of ₹1,230 as it believes the company is a rising leader in the Integrated Facilities Management Services (IFMS) sector.

“Krystal stands out as the fastest-growing player in the IFMS industry, offering a comprehensive suite of services, including IFMS, private security, staffing, and catering,” the brokerage said in its August 2024 note.

Krystal Integrated with a revenue CAGR of 30% from FY21 to FY24 is the fastest-growing company in its sector. It has far outpaced its peers like SIS Ltd., UDS and Quess Corp whose growth ranges from 10 per cent to 26 per cent on the back of its ability to deliver bundled and customised solutions, underpinned by a strong management team, suggested Monarch Capital. The company has seen a 50% CAGR in EBIDTA, signalling robust profitability and operational efficiency.

The company is also focused on high-value sectors, particularly through government contracts, positioning itself advantageously in the market. Looking ahead, the company also has significant upside potential in the B2C segment, where its expertise and established brand could unlock new growth avenues, said the brokerage.

Overall, Krystal's impressive growth trajectory, strong financials, and strategic positioning make it an attractive investment opportunity for long-term growth.

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