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Hidden Gem Protean eGov Technologies

ICICIdirect Research 27 Dec 2024 DISCLAIMER

Protean eGov Technologies – Erstwhile known as NSDL e-Governance, the company focuses on developing digital public infrastructure (DPI) and e-governance initiatives for various governmental bodies in India.

The company has 3 core verticals wherein it has dominant market share and steady growth visibility. This includes

i) Tax services – wherein it is largest issuer of pan cards with market share of 64%.
ii) pension services – wherein it is CRA i.e. central record keeping agency for NPS and Atal pension yojana with a combined market share of 97%. Only 6% of private sector employees in India have pension coverage currently, thus presenting structural growth roadmap.
iii) Identity services – It is one of the forerunners offering all facets i.e. online PAN verification, Aadhaar authentication, e-KYC & e-Sign. This space shall comfortably grow at 20-25%.

Besides, Protean has ventured in new age businesses including Open Digital Ecosystem (ODE). Here, for instance, it is pioneering member of ONDC wherein Protean provides the infrastructure to connect all buyers to all sellers on the open network. This could transform the domestic ecommerce market and offers huge growth headroom for Protean.

Similarly, it aims to build data stacks in field of agriculture, education and health to improve buyer/ seller dynamics.  

Major investment phase is behind while the benefits are set to accrue going ahead which shall improve profitability and return ratios.

We expect 26.2% PAT CAGR over FY24-27E.

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