Shares of RateGain Travel Technologies jumped over 10% on Wednesday as brokerage firm Investec initiated 'buy' coverage on the stock. The brokerage has set a target price of Rs 775, an upside of 76.5%.
RateGain shares surged 10.56% intraday, trading at Rs 484.4 apiece on NSE. The scrip pared a fraction of the gains to settle 9.89% higher at Rs 481.5, as against a 1.66% climb in the benchmark Nifty 50.
In its latest note, Investec highlighted Rategain's integrated capability stack in comparison to its peers, and minimal impact from AI-led disruption on the company's business, as the key reasons for the coverage initiation.
Rategain's end-to-end platform is in contrast with point-solution peers such as SiteMinder, Derbysoft or Lighthouse, Fornova or Google Travel. Through integrating proprietary travel data across guest acquisition, distribution, and in-stay engagement, the company provides "an unmatched unified tech stack," Invetsec said.
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The brokerage noted that RateGain's market cap is around one-fourth that of Affle 3i despite the company's travel-focused MarTech franchise operating at a comparable scale.
This data integration helps to bring together a product that cannot be replicated by its peers. In comparison to integrated players such as Amadeus, Sabre, and Cendyne, RateGain stands out in its ability to offer quality data for guest acquisition. Additionally, RateGain has invested $5 million in the current year, constituting nearly 4% of the company's revenue. This is already leading to 9 million deal wins being 30% higher versus the prior year. The company has also launched new product propositions such as UNO, an AI-powered hotel, Smart Distribution, Smart ARI, UNO Viva and RG Insights.
"We believe FY27E is likely to see stronger organic growth than FY26E," the note read.
The brokerage also estimates that the organic revenue growth will improve from 2% in FY26 to 11% in FY27. In addition, the revenue creation from the acquisition of Sojer, along with synergy benefits on costs, is expected to boost EBITDA.
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