Nuvama Institutional Equities
Target: ₹1,369
CMP: ₹858.85
Krystal Integrated Services is a leading integrated facilities management services company in India, specialsing in diverse sectors such as healthcare, education, public administration, airports, railways and metro infrastructure, and retail.
With 77.6 per cent of its revenue sourced from government contracts, Krystal stands as a strong player in the industry. The company’s revenue composition is 54.7 per cent from Integrated Facilities Management Services (IFMS), 31.7 per cent from Staffing Services, 10.7 per cent from Security Services, and 2.9 per cent from Catering Services.
Management anticipates that the IFMS, Staffing, and Security services segment to grow 1.2–5 times faster than the industry average from FY23 to FY26E, with significant growth potential in the catering segment. Notably, Krystal has achieved an impressive 19 per cent revenue CAGR over the past decade, driven by strong industry tailwinds, new contracts, and high-quality service offerings.
Projections for FY24–26E indicate a sales/EBITDA/PAT CAGR of 27/36/40 per cent, with an expected EBITDA margin expansion by 97bps to 7.7 per cent, reflecting positive operating leverage and a favorable service mix. Given these factors, we initiate coverage with a ‘BUY’ rating and a target price of ₹1,369, valuing the stock at 20x FY26E earnings.