Target: ₹1,455
CMP: ₹952.50
Protean eGov Technologies reported muted revenue growth of ₹222.20 crore in Q4 while EBITDA declined 18 per cent y-o-y due to higher operating expenses. We maintain a Buy rating on steady PAN and pension revenues and expected growth from new and international businesses.
PAN 2.0 was a project technology revamp of the IT Department systems. These systems are currently operated directly by the IT Department. Protean continues to hold the mandate for PAN processing and issuance, which remains unaffected. Since PAN 2.0 implementation will take 18 months, its impact on existing services appears minimal.
The PAN segment declined 4 percent y-o-y due to the high base of last year, which benefited from pre-election government scheme launches. International revenue grew about 70 per cent y-o-y, driven by the rollout of an education-focused DPI solution in Morocco and a newly secured mandate in Ethiopia.
Protean is currently valued at a P/E multiple of 29x, based on FY27e earnings. We project a healthy, 23 per cent, earnings CAGR over FY25-27e along with operating leverage. We assign a P/E multiple of 42x to FY27e to derive a TP of ₹1,455, reflecting the company’s steady growth prospects and market position.
Risks: Changes in government policies related to digital services, technological risks.
Published on May 27, 2025
