Share prices of IT firm Capgemini India are soaring in the unlisted market. In one year, the stock has risen by 3.6 times. It was trading at Rs 2,500 last year and now has risen to Rs 11,500 in the market.
The rise in the stock price is a lot more than that in the case of many of its peers like TCS and Infosys. In the last year, while the share price of Tata group’s cash-cow TCS has risen just over 30%, Infosys share price has risen around 59%.
“The current P/E level for Capgemini is near to 39 while all other companies like TCS and Infosys have P/E of around 36. So, it is comparable with its peer group”, says Likhita Chepa, Senior Research Analyst at CapitalVia Global Research.
She adds that Capgemini has had a strong order book in the last year which has aided the growth.
The company Capgemini SE, headquartered in Paris, France, has also witnessed a jump of over 100% in one year. It is currently trading at over 200 euros a share.
IT sector analysts point out that this rise in the India subsidiary is also linked to the parent company's share prices increasing in Europe.
The rise in Capgemini’s share price is more comparable with other IT firms like Mindtree and Happiest Minds that have risen over 200% in the last year. However, in terms of price per share, Capgemini has surpassed most of these known names.
An analyst of unlisted stocks says that the stock has been undervalued and stagnating at Rs 2,500 for a long time before it could get some traction. This analyst says that it is this pent-up demand that has led to the steep rise in Capgemini India’s stock price.
“Last year we saw demand for IT stocks and Capgemini benefitted from this. Largely this increase in price hike has been because of the demand for IT stocks.”, another analyst told DH. This analyst added that Capgemini can be compared with its global peers like Accenture who have also done well.
Analysts also say that it can still be comparable with other IT firms like TCS and Infosys as the P/E is along the same lines.
On Tuesday, IT stocks TCS ended at Rs 3,483.75 per share while Infosys ended at Rs 1,697.85 per share.
The company’s growth in the Asia Pacific and Latin America region is 21.3% YoY in H1FY22 and the operating margin from these geographies has been 12.5% in H1 of this financial year.
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