Ventura Initiates Coverage On Tracxn With ‘Buy’, Sees A ‘Compelling’ Investment Opportunity

Ventura Securities has initiated its coverage on market intelligence startup Tracxn Technologies with a ‘buy’ rating and a price target (PT) of INR 182 per share, which implies an upside of 58.1% to the stock’s last close on Friday (January 19).

In a research note published this week, the brokerage said that Tracxn’s role in the market intelligence and data sector is becoming increasingly crucial in the context of rising private investment globally and governmental efforts to improve business environments. 

In fact, this trend boosts the demand for the startup’s products and ensures a stable revenue outlook, the analysts at Ventura believe.

Additionally, Tracxn expanding its customer base across various regions, with no single country accounting for more than 30% of its total revenue, indicates a strategic diversification, they said.

Founded in 2012 by Neha Singh and Abhishek Goyal, Tracxn is a market intelligence platform that offers a SaaS-based tool that tracks company financials and captables of entities. It claims to currently track 2.3 Mn entities through more than 2,500 feeds categorised across industries, sub-sectors, geographies, and networks globally.

As of the quarter ending September 2023, the startup’s customers were spread across over 50 countries. It earned 66% of its total revenue from the international markets in Q2 FY24.

Tracxn’s customer base includes private market investors such as venture capital and private equity firms and investment banks as well as corporates, government agencies, government banks, academic institutions, startup accelerators and incubators, the brokerage noted.

Tracxn is showcasing a “compelling” investment opportunity, supported by “significant” growth in its domestic private markets, expanding presence in international markets, and a dominant role in the private data market, said Ventura.

Over the FY23-26 period, the brokerage expects Tracxn’s revenue/ EBITDA/ PBT to grow at a CAGR of 15%/ 104%/ 38%, respectively.

“Strong revenue visibility along with the benefits of operating leverage is expected to deliver margins expansion and improve key metrics,” Ventura analysts opined.

During FY21-23, Tracxn’s revenue grew at a CAGR of 33% from INR 44 Cr to INR 78 Cr. Venture sees its revenue grow at a CAGR of 15% to INR 118 Cr over FY23-26 on account of increasing engagement and increasing penetration with both domestic and global customers. 

In its last reported quarter – Q3 FY24 – Tracxn registered a 46.7% year-on-year (YoY) jump in its profit after tax to INR 2.2 Cr. The startup’s operating revenue increased 12.5% YoY to INR 21.5 Cr during the quarter.

Shares of Tracxn have gained over 36% in 2023. Recently, Elevation Capital offloaded over 15.66 Lakh shares of Tracxn via block deals worth INR 15.09 Cr. 

The company’s shares ended 0.48% higher at INR 115.1 on the BSE on Friday.

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