Domestic brokerage firm Ventura Securities has initiated coverage on a penny stock, which is price less than Rs 30 and has a market capitalization of less than Rs 300 crore.
The brokerage firm sees up to 150% upside in the stock in the next two years period and the stock is Virinchi.
Founded in 1990, Hyderabad-headquartered Virinchi is an emerging information technology and healthcare company with a proven track record in SaaSbased financial technology, IT services, and healthcare delivery. It operates through four business – SaaS (US Fintech), Healthcare, IDC & IT Services, and Payment & Credit Services (India Fintech) – with a strategic focus on digital transformation across industries.
Virinchi’s diversified portfolio underpins a resilient business model, blending innovation and stable annuity income streams. Its SaaS division holds a strong position in the US subprime lending software market, with about 30% market share and 18 institutional clients. While growth in this area had moderated, new client wins and expansion into check-cashing are projected to drive revenue at a CAGR of 9.8%, reaching INR 176 crore by FY28, according to Ventura Securities.
Shares of Virinchi were seen around Rs 27 apeice with a total market capitalization close to Rs 280 crore. The stock is down 17% form its 52-week high at Rs 32.69 hit in December 2024. It has jumped nearly 40% from its 52-week low at Rs 19.37, hit in May this year.
The healthcare segment, operated through Virinchi Healthcare Pvt. Ltd., is undergoing a turnaround. Bed capacity is set to expand from 700 to 1,100, with a Rs. 70 crore oncology block under development. Revenue from this vertical is anticipated to grow at a CAGR of 29.8%, reaching INR 228 crore by FY28. This growth is supported by improved occupancy, the enlistment of reputed medical professionals, and higher average revenue per occupied bed (ARPOB), as noted by Ventura Securities.
Across FY25-28E, Virinchi’s consolidated revenue, EBITDA, and net earnings are forecast by Ventura Securities to grow at CAGRs of 16.0%, 14.7%, and 252.7% respectively, resulting in estimates of INR 470 crore, INR 135 crore, and INR 21 crore. EBITDA margins are expected to decline by 90 basis points to 28.7% due to increased costs in the hospital business, while net margins are projected to rise by 430 basis points to 4.5% on the back of anticipated reductions in interest costs from quicker debt repayment.
As of September 30, 2025 period, promoters own 37.51 per cent stake of the company, while public shareholders own 62.49 per cent stake. Nearly 38,000 investors own about 5.17 crore or 50.42 per cent stake in the company, while mutual funds or FPIs own nearly negligible stake in the company.
Ventura Securities highlights that consistent free cash flow generation and ongoing deleveraging efforts will reinforce Virinchi’s balance sheet resilience. Return on equity (RoE) and return on invested capital (RoIC) are expected to improve by 400 and 510 basis points to reach 4.1% and 10.5% respectively by FY28E. The business mix, featuring sustained SaaS growth and healthcare expansion, is identified as a key driver for long-term value creation.
According to Ventura Securities, “A niche SaaS leader in the US subprime space, a scalable hospital turnaround story, and emerging multi-vertical synergies establish Virinchi as a multi-year compounder with high optionality and significant upside potential.”
“Virinchi trades at an attractive FY28E P/E of 13.4 times. Using a SOTP valuation, the fair value is estimated at Rs 67, implying 148% potential upside over 24 months. With a restructured balance sheet, strong vertical synergies, and catalysts in both fintech and healthcare, VL stands positioned as a compelling small-cap turnaround story in India’s technology and healthcare space,” it added.