Saksoft Skyrockets 190% in 2 Years—1000% in 4 Years! Is This Small-Cap IT Stock Still a Buy?

Saksoft, a small IT company, has shown impressive growth recently, giving investors over 10 times their money. Although the stock has had some profit-taking lately, it continues to grow significantly over the long term.

In the past two years, the stock’s price increased from ₹102 to ₹290, which is a 190% gain. Over the last four years, the stock has surged nearly 1,000%, and in the past decade, it has skyrocketed 7,150%.

Saksoft has been a standout performer in two of the last four years, with a 161% gain in 2023 and a 154% return in 2021. The company focuses on digital transformation and offers services like application engineering, quality assurance, data analytics, cloud infrastructure, and cybersecurity.

Based in Chennai, India, Saksoft operates 16 offices across various countries, including the USA and Europe. The company generates revenue from digital engineering (55%), data and cloud (25%), testing (18%), and infrastructure and security (2%). High-margin areas include digital engineering and testing, with potential for improvement in data and cloud services as AI-related deals grow.

Monarch Networth Capital’s View

The brokerage Monarch Networth Capital recently started covering Saksoft and gave it a ‘buy’ rating with a target price of ₹435, indicating a 47% potential increase from the current price. In a best-case scenario, they see a possible 60% rise, with a target price of ₹475.

Monarch believes Saksoft’s continued growth is driven by strong IT spending in digital engineering, cloud, data, and digital commerce. They expect revenue to grow at 21% annually, EBITDA at 22.3%, and PAT at 24.4% over the next few years.

Why Saksoft Stands Out

Saksoft has consistently outperformed its peers in various metrics. The company has grown its earnings per share (EPS) by over 20% annually for the past decade, thanks to strategic acquisitions that have expanded its capabilities and market reach. These acquisitions have also helped maintain strong profitability with high margins.

Saksoft’s focus on niche sectors and its strong global presence give it a competitive edge. The company serves major clients with revenues between $200 million and $3 billion and continues to show strong financial performance.