Protean Share Price Target 2025: Buy, Sell or Hold? Here’s What Brokerages Say About the IT Stock

The shares of Protean eGov Technologies Ltd have been in focus on Wednesday, for a third consecutive day, as a key investor has sold their stake in the company on Tuesday.

Why Is The Protean eGov Stock In Focus?

Protean eGov Technologies is a digital infra services provider, whose shares have declined nearly 30% in two trading sessions as a major stakeholder has sold their stake in

The company is also going to announce its quarterly results for the fourth quarter of the financial year 2024-25.

Why Is The Stock In Focus?

According to NSE data, the Massachusetts Institute of Technology sold 4.02 lakh shares of the company on Tuesday via bulk deals and the number of shares that were sold amount to 0.99% of the total outstanding equity of the company.

The shareholding pattern for March does not feature MIT's name as it may have been owning less than 1% stake.

What Does Sharekhan Project?

According to a Mirae Asset Sharekhan report, the medium-term outlook turns uncertain for the stock.

Protean eGov Technologies was not shortlisted for the next phase of the PAN 2.0 RFP, which is a technology revamp project of the Income Tax Department’s PAN system, the report added.

This exclusion from PAN 2.0 project restricts the firm's potential to scale tax services revenue and strengthen its digital tax ecosystem position, risking market share erosion to the winning bidder in the medium term, it said.

According to the report, the company's new revenues streams such as ONDC, Data Stack, Cloud and Infosec services are currently at a nascent stage and will take time to gain traction and provide material revenues to offset potential impact.

This further limits Protean's growth potential in tax services and could lead to market share erosion in the medium to long-term in the core tax services vertical leading to de-rating of the stock. At CMP, the stock trades at 46.8/29.7/22.9x its FY25/26/27E EPS, it added.

Book Out, Says Sharekhan

According to the report, protean has missed getting shortlisted for the Rs 1,435 crore PAN 2.0 project, which is a significant initiative to modernize taxpayer registration.

While the firm holds a mandate to process as well as issue PAN cards  which is independent of outcome PAN 2.0 RFP and is likely to have limited or minimal impact on existing PAN services revenues in the near term.

However, this raises concerns, as per the report, regarding potential loss of existing mandate for processing and issuing PAN if the RFP route is sought by the ITD.

Additionally, winning the project would have boosted the firm's revenue significantly.

Therefore, Sharekhan recommends 'Buying Out' of this share, for investors.

What Are The Risk Factors Of Associating With The Stock?

Key risk factors include change in government policies, regulations, or compliance requirements related to digital services and financial sectors, geopolitical risks, currency fluctuations, differing regulatory environments, cybersecurity threats, among others.

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