Personal Finance & Investment
Personal Finance & Investment
TREND | 10 Feb 2020
HDFC Securities
We increase our TP to Rs 595 based on 9x (~18% discount to 5Y average) FY22E EPS plus Rs 31/sh for residual 4.7% stake in Majesco US. Mastek announced the acquisition of Evosys in a two step transaction, which involves cash payout of USD 65mn and dilution of 17.5% in Mastek Ltd. The deal is valued at EV/EBITDA of 9.2x and P/E of 11.2x based on FY19 financials and 70% economic interest. The deal is EPS accretive and will boost FY21/22E EPS by 11.8/14.1% respectively. Post the traction, Evosys promoters will hold 15% in Mastek Ltd and 30% CCPS in TAISTech, converted to equity based on targets over the next three years. This is a complex traction but involves value unlocking and diversification of revenue. Risk involves higher dependence on Oracle and multi geography footprint, which the company has not handled before.
More from Personal Finance & Investment
Recommended