ideaForge Technology shares crash 10% on profit booking post stellar listing

After rallying 93 per cent on its listing day on Friday, shares of ideaForge Technology come crashing on Monday morning, as investors chose to book profits on concerns over high valuations post stock listing.

ideaForge Technology delivered surprising returns but investors should book profits and exit their positions, Anubhuti Mishra, Equity Research Analyst at Swastika Investmart had said on Friday post ideaForge Technology's stellar listing.

“This is because after listing the stock is already trading at a significant premium to its issue price. Additionally, there are some business-related risks associated with the company, so it is better to lock in these gains now rather than take the risk of carrying them forward," Aggressive investors can still hold it with stop loss at Rs 1,170, she had advised,” she said.

The stock held on to that level for now, hitting a low o Rs 1,171.10 so far. The stock was down 9.6 per cent at this price over Friday's closing value of Rs 1,295.50.

The Mumbai-based company had the largest operational deployment of indigenous UAVs across India, with its drone manufactured taking off every five minutes on average for surveillance and mapping. It is one of the few original equipment manufacturers in the world that have its own exclusive autopilot sub-system and ground control software and takes full integration of its payloads, communication system and packaging.

A brokerage Asian Markets Securities, meanwhile, has initiated coverage on the stock.

"We expect ideaForge to see robust 30 per cent/ 60 per cent revenue/ PAT CAGR during FY23- 26E, driven by its outstanding order book, and a substantial pipeline of potential awards. We are initiating coverage with a 'BUY' rating, considering the medium-term perspective. With a significant addressable market, we assign a target price of Rs1,607 per share, valuing the company at 50 times FY26E," it said.

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Founded in 2007 and led by first generation entrepreneurs, ideaForge primarily caters to customers with applications for surveillance, mapping and surveying. Its customers include the armed forces, central armed police forces, state police departments, disaster management forces, forest departments besides other civil customers. It is one of the first few companies in India to enter the UAV market and ranks 7th globally in the dual use category i.e civil and defence as per the report published by Drone Industry Insights in December 2022.

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