Hold Inventurus Knowledge Solutions, target price Rs 1,820: ICICI Securities

ICICI Securities has a hold call on Inventurus Knowledge Solutions with a target price of Rs 1,820. The current market price of Inventurus Knowledge Solutions is Rs 1730.5. ICICI Securities says with a mammoth acquisition of Aquity under its belt (valued at $221.4 million, implying 2.12 EV/FY24 sales), cross selling to the newly acquired 804 customers is the key to unlocking higher growth. IKS aims to reduce the total client count from Aquity to ~500, retaining only enterprise scale clients. Aquity brings in: 1)accolated virtual scribe and transcription solutions; and 2) large data sets to train the upcoming AI-led offerings. Key risks are M&A synergy delay and adverse disruption from AI.

Investment Rationale

Inventurus Knowledge Solutions (IKS Health) is a Platform as a Service (PaaS) company that caters to US' healthcare provider segment. It focusses on outsourcing the routine chores of physicians. IKS? platform has 16 key features, spanning across chores in a physician?s value chain, bundled into: 1) admin offerings; and 2) clinical offerings. With strong financial credentials (industry-leading growth/ margin /RoE), synergistic large acquisition (Aquity) and US healthcare industry-led tailwinds in its favour, the delta for IKS lies in the cross-selling-led potential arising from the ~800 customers added via the Aquity acquisition. I-Sec models FY25-28E revenue/EPS CAGRs of 20%/34%. While they like IKS business for its superior financial performance, technology prowess and attractive large scale opportunity; valuations at 33x FY27E P/E are rich. The brokerage recommends HOLD with of target price of Rs 1,820 (based on 35x FY27 EPS).


Promoter/FII Holdings
Promoters held 63.72 per cent stake in the company as of 31-Dec-2024, while FIIs owned 5.47 per cent, DIIs 4.41 per cent.