Going by the management’s guidance of 15% revenue growth over long term (assuming 15% is achievable this year as well), one year forward EV/Sales stands at ~ 1.8. Assuming, the full year EBITDA margin at 17%, the EV/EBITDA would be ~ 11.
When the market is raging with all kinds of high valuations, I feel the current kind of valuation for a business with multiple long term growth tailwinds is very lucrative.
3 years down the line, if they do manage to grow in line with their target (which as per them is conservative). Revenue would stand at 1500 crores and EBITDA (margin 20%) : 300 crores. Market wouldn’t be afraid to give a higher multiple at that stage. Don’t want to get into stock price translations according to the performance…
Disc : Invested since lower levels. Forms the biggest chunk of my PF. Have added today.