Low PE & high ROE stock under Rs 130 in green as the company from IT-Software sector acquires Grenew DMCC, Dubai – details inside!

The shares of the company have a PE of 10x, an ROE of 74.5 per cent and an ROCE of 86.8 per cent.

Quicktouch Technologies Limited, an Indian IT company, made a strategic shift in its acquisition plans. Originally, they aimed to acquire Grenew FZE, a subsidiary company based in UAE that specializes in refurbishing and recycling electronics. However, on June 20, 2024, the board of directors decided to take a bigger step by acquiring Grenew DMCC instead. Grenew DMCC is the parent holding company of Grenew FZE, and by acquiring it, Quicktouch gains control over the entire Grenew group of companies. This offers significant advantages compared to just acquiring the subsidiary.

Grenew DMCC is a Dubai-based holding company with a much larger reach. They specialize in the trading of used electrical and electronic appliances, and their network spans the US, UK, Africa, Hong Kong, and the Middle East. This aligns perfectly with Quicktouch's long-term goals of diversifying its business and expanding into new international markets. Furthermore, Grenew DMCC boasts a revenue of USD 38,10,420 for the year 2022-2023, indicating a potentially profitable venture for Quicktouch.

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The acquisition is expected to be finalized by December 2025. Quicktouch will be making an all-cash purchase, acquiring a 100% stake in Grenew DMCC. The price per share is set at AED 310.35. This move by Quicktouch signifies a significant investment with the potential for substantial returns. By acquiring the holding company, they gain control over a well-established network in the used electronics trading industry, propelling them into new markets and revenue streams. The acquisition also presents an opportunity to integrate Quicktouch's existing IT expertise with Grenew's established operations, potentially creating a more comprehensive service offering in the future. Overall, this strategic shift positions Quicktouch for significant growth and a stronger foothold in the international market.

Today, shares of Quicktouch Technologies Limited gained 3.82 per cent to Rs 127.70 per share from its previous closing of Rs 123. The stock’s 52-week high is Rs 274 and its 52-week low is Rs 105.

Incorporated in 2013, Quicktouch Technologies Limited is an information technology company. The company is in the business of software IT solutions and consulting services, IT product/software development & software commercial training and web designing.  

The company has a market cap of Rs 73 crore and reported positive numbers in its Quarterly Results (Q4FY24) and annual results (FY24). According to quarterly results, the company reported net sales of Rs 34.05 crore in Q4FY24 compared to net sales of Rs 42.74 crore in Q4FY23. The net profit increased by 139.2 per cent to Rs 1.15 crore in Q4FY24 compared to Rs 0.48 crore in Q4FY23. In its annual results, the net sales increased by 39 per cent to Rs 122.16 crore and net profit increased by 5.3 per cent to Rs 6.73 crore in FY24 compared to FY23.

The shares of the company have a PE of 10x, an ROE of 74.5 per cent and an ROCE of 86.8 per cent. The stock is up by 21.62 per cent from its 52-week low of Rs 105 per share.

Disclaimer: The article is for informational purposes only and not investment advice.