The festive week may have passed, but fireworks are still on as far as Indian equities are concerned. While the benchmark indices have gained about 2.5 per cent since last week, some stocks have massively outperformed the broad markets in the past week. One such stock is that of the financial technology company Infibeam. The company, which offers integrated digital platforms, topped the returns chart, registering almost 23 per cent gains since October 21. After hitting the upper circuit in Friday’s trade, the stock closed about 2 per cent higher in trade today.
The stock’s strong up move was in reaction to the Reserve Bank of India’s nod to the company for a payment aggregator license. Infibeam is India’s first listed company in the payment infrastructure space. The over two-decade-old company is among the country’s leading digital payment and enterprise software solution providers, operating payment gateways with the highest portfolio of options in over 200 multi-currencies. CCAvenue, the payment gateway, is among the prominent solutions in the market. The company, besides India, also operates in overseas markets such as the US, United Arab Emirates and Saudi Arabia. Infibeam has the unique distinction of being a profitable, desi fintech company.
In the June 2022 quarter, the company posted net profit growth of 77 per cent to ₹23 crore year-on-year, while revenues nearly doubled to ₹418 crore versus ₹216 crore in 1QFY23. The operating profit margin was lower at 10 per cent in 1QFY23, compared to 13 per cent in April-June 2021.
At ₹17.7, the stock currently trades about 51 times its trailing 12-month earnings. Interestingly, its listed counterpart One97 Communication, the parent of Paytm, is yet to make profits even at the operating level. According to Bloomberg consensus estimates, the company’s earnings per share is expected to grow by 45 per cent and 29 per cent in FY23 and FY24, respectively, valuing the stock at 39 times and 30 times its estimated FY23 and FY24 earnings.