Mastek Ltd. share price target and research reports

Latest analyst research reports with target prices and PDF download for MASTEK, BSE:523704 Mastek Ltd.

Mastek Ltd.

30 Oct 2020

2436.30

-2.14%

Mastek

Buy: Mastek Ltd.

Sharekhan

We recommend a Buy rating on Mastek Limited with a price target (PT) of Rs. 1,040 as risk-reward balance remains favourable. Company delivered a strong set of numbers in Q2FY21, led by strong growth in both the UK and US businesses and accelerated growth in the Oracle services business; EBITDA margin expanded by 348 bps q-o-q to 21.1%; order-booking grew 22% q-o-q. Management expects H2FY2021 to be better than H1FY2021, led by a strong order book, continued growth in UK government projects and higher demand for cloudrelated services; Evosys order-book was up by over 65% y-o-y The stock is trading at a reasonable valuation of 10x its FY2023E EPS; net cash...

Mastek Ltd. has an average target of 3207.33 from 3 brokers.

Mastek Ltd.

31 Jul 2020

2436.30

-2.14%

Mastek Ltd

Buy: Mastek Ltd.

Recommendation Target

ICICI Securities Limited

Organic revenues are expected to be impacted by a ramp down by customers in UK private retail & financial services and pricing pressure in US retail partly offset by higher growth from UK government business. However, vendor consolidation opportunity in US retail and integrated offering of Evosys & Mastek is expected to boost the topline. There is a significant shift of enterprise towards cloud migration and Evosys expertise in Oracle cloud migration is gaining traction. This coupled with Mastek's capability to cross-sell data analytics, application support and digital...

Mastek Ltd. has an average target of 3207.33 from 3 brokers.

Mastek Ltd.

16 Jun 2020

2436.30

-2.14%

Mastek Ltd

Hold: Mastek Ltd.

Recommendation Target

ICICI Securities Limited

The company's organic revenues in the near term are expected to be under pressure led by a ramp down by customers in UK private retail & financial services and deferral of sales to later part of the year. In addition, the US geography, which is primarily focused on the retail sector, faced a delay in projects and pricing pressure, which is further expected to impact organic revenues. However, the acquisition of Evosys, vendor consolidation opportunity in US retail and higher sales pipeline in UK government are expected to drive overall revenues in FY21E. We expect FY21E revenues to...

Mastek Ltd. is trading above its 150 day SMA of 2393.7

Mastek Ltd.

11 Feb 2020

2436.30

-2.14%

Mastek Ltd

Sell: Mastek Ltd.

Target

ICICI Securities Limited

Evosys is focused on Oracle cloud implementation and consultancy. It provides a gamut of solution offerings like Oracle HCM Cloud, Oracle ERP Cloud, Oracle SCM Cloud, Oracle CX, Oracle EPM Cloud, PaaS solutions (including custom-built solutions), AI, IoT and machine learning. The company generates 60% of revenues from Oracle cloud implementation, 32% from support services and rest from licence revenues. Geography wise, the company generates 44% of revenues from Middle East, 17% from North America, 30% from the US, UK and the rest from APAC region. Further, the...

Mastek Ltd. is trading above its 150 day SMA of 2393.7

Mastek Ltd.

29 Jan 2020

2436.30

-2.14%

Mastek (3QFY20): Hit by Brexit uncertainity. Maintain BUY

Buy: Mastek Ltd.

Target

HDFC Securities

Mastek has invested in strengthening its executive team both in US and UK geography. UK Govt. growth has slowed down due to Brexit uncertainties and UK elections but is expected to revive post the Brexit outcome and completion of spending review. US revenue is impacted by Retail slowdown but will recover led by ramp-up of new deals. Mastek will benefit from off-shoring opportunity at UK public sector given its long relationship with UK government and limited competition from Indian IT, off-shoring can aid margin expansion. We expect GBP growth for FY20/21/22E at -2.7/8.2/11.6% and 11% EPS CAGR for FY19-22E. The stock trades at 9.0/7.7x FY21/22E and Brexit clarity will result in re-rating. Mastek's stake in Majesco US (Rs 39/sh) and net cash (~Rs 145/sh) protects downside. We maintain BUY on Mastek following a weak 3Q on revenues but stable margin performance. UK elections, Retail slowdown, Brexit uncertainty and furloughs impacted revenue growth but cost management was impressive. Mastek successfully monetised 56% of its Majesco US holding and net cash stands at Rs 3.71bn (35% of Mcap). Our SoTP based TP of Rs 510 is based on 9x (~18% discount to 5Y average) Dec-21E EPS plus Rs 39/sh for 5% stake in Majesco US.

Mastek Ltd. is trading above its 150 day SMA of 2393.7

Mastek Ltd.

21 Nov 2019

2436.30

-2.14%

Mastek Ltd

Sell: Mastek Ltd.

Recommendation Target

ICICI Securities Limited

During FY16-19, the company's rupee revenue has grown at a healthy 25.2% CAGR. Acquisition of TaisTech got consolidated in FY18 for full year. However, in the near term (H1FY20), deferral of projects and delay in deal closures due to Brexit in UK had led to weak H1. Owing to major proportion of revenues coming from UK geography and government, we expect FY20E to report a revenue decline. The weakness would flow down to EBIT margin and profitability front. Though improving sentiments in UK government business, rising proportion in US business along with cost optimisation...

Mastek Ltd. is trading above its 150 day SMA of 2393.7

Mastek Ltd.

18 Oct 2019

2436.30

-2.14%

Mastek (2QFY20): Brexit deal = Relief. Maintain BUY

Buy: Mastek Ltd.

Target

HDFC Securities

Mastek has been strengthening its executive team, three new additions in past eight months. We believe these are strategic initiatives for driving growth. We like Mastek's initial success in recovering US business and managing the Brexit uncertainty. Mastek will benefit (margin lever) from the off-shoring opportunity (~USD 20mn) arising with UK public sector given its long term relationship with UK government and limited competition from Indian IT. Brexit deal is positive but we would wait for further clarity to bake in our estimates. We expect GBP growth for FY20/21/22E at 0.1/9.6/11.0% and 5.4% EPS CAGR for FY19-22E. Mastek's stake in Majesco US (Rs 94/sh) and net cash (~Rs 79/sh) protects downside. We maintain BUY on Mastek despite slight miss on revenue and margins. Brexit deal announcement is positive but we do not build any optimism in our estimates and will wait for clarity. We cut our EPS est. by ~5% for FY21E. SoTP based TP of Rs 505 implies 9x Sep-21E EPS plus Rs 94/sh for 12% stake in Majesco US.

Mastek Ltd. is trading above its 150 day SMA of 2393.7

Mastek Ltd.

23 Jul 2019

2436.30

-2.14%

Mastek (1QFY20): Sailing through tough times. Maintain BUY

Buy: Mastek Ltd.

Target

HDFC Securities

Mastek has successfully ramped up UK Govt. digital business (+6.9% 4-QTR CQGR). Mastek is the only Indian IT company in UK Govt's top-10 vendors list. We also like its initial success in recovering the US business (+8.7% QoQ) led by increased focus and management changes. Mastek is blessed with low exposure to legacy (~16% of rev) and can deliver 11.4/8.6% GBP rev/EPS CAGR over FY19-21E. Its stake in Majesco US (Rs 94/sh) and net cash (~Rs 67/sh) provide additional comfort. Risks to our thesis include prolonged deferment of spend in UK private due to Brexit and GBP depreciation. We maintain BUY on Mastek following a weak 1Q on revenues but stable margin performance. US turnaround is faster than expected and order book growth is encouraging. We cut est. by ~4% factoring soft UK Pvt. Our SoTP of Rs 618 implies 11x FY21E EPS plus Rs 94/sh for 12% stake in Majesco US.

Mastek Ltd. is trading below its 30 day SMA of 2502.1

Mastek Ltd.

17 Apr 2019

2436.30

-2.14%

Mastek (4QFY19): Buy it, despite Brexit. Maintain BUY

Buy: Mastek Ltd.

Target

HDFC Securities

With low exposure to legacy (~16% of rev), Mastek generates low teen margins, given higher on-site revenues and effort mix. We like its success in ramping up UK Govt digital business. Mastek is the only only Indian co in their top-10 vendor list. Co can generate 14.0/13.4% GBP rev/EPS CAGR over FY19-21E (despite US softness and Brexit worries). Its stake in Majesco US (Rs 83/sh) and net cash (Rs 63/sh provide additional comfort. Risks to our thesis include deferment of spend due to Brexit and GBP depreciation. We maintain BUY on Mastek following an inline 4QFY19. Our SoTP is Rs 657 implying 11x FY21E EPS which includes Rs 83/share for 12% stake in Majesco US.

Mastek Ltd. has an average target of 3207.33 from 3 brokers.

Mastek Ltd.

29 Mar 2019

2436.30

-2.14%

Mastek (Initiating Coverage): Version 2.0 BUY

Buy: Mastek Ltd.

HDFC Securities

We Initiate coverage with a BUY rating and a TP of Rs 660, based on 11x FY21E EPS. Mastek, founded in 1982, is one of the oldest IT companies in India. Mastek has experience spanning over three decades but in its current version, its just a four-year-old organisation (Demerger with Majesco happened in 4QFY15). Mastek has transformed itself post the demerger, led by (1) Appointment of experienced and capable CEO, John Owen, in Nov-2016 (2) Direct relationship with UK Govt. vs being a sub-contractor earlier and (3) Acquisition of TAIS Tech (SI for Oracle ATG), which marks its entry in the US. Under the new leadership, Mastek has delivered healthy revenue CAGR of 32% (~23% organic) and margin expansion of ~370bps over FY17-19E.

Mastek Ltd. is trading above its 150 day SMA of 2393.7

Is Mastek Ltd. worth buying?

209 Votes:

Buy 75.12%

Sell 17.22%

Hold 7.66%

RESEARCH REPORTS

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