Mastek Ltd. share price target

During the quarter, the company won one of the largest deals with US$25 million in the UK government segment spread over three years and extendable by another two years. In addition, the company is also witnessing healthy growth in new logo acquisition (which has long term growth potential) and increasing deal sizes (in the range of 35-100 million dollars by partnering with tier-1 and by participating in larger deals on standalone basis). Mastek is also building its sales & marketing to drive growth. Further, the company's focus on client mining, providing integrated...

During the quarter, the company won many multi-million dollar deals across geographies mainly led by integration of Evosys and the company's capability to offer end to end solution. Mastek is also building its sales & marketing to drive growth. It has added 248 employees in the quarter and plans to add similar number of employees in the next quarter indicating improving growth in coming quarters. Mastek has added 12 customers with US$1 billion in revenues indicating robust potential for client mining via cross selling of Evosys and Mastek capabilities. The company is also seeing...

Rising adoption of smartphones, high internet speed and social distancing (due to Covid-19) has changed consumer behaviour. Consumers now prefer to transact (buy a product) virtually over the smartphone via an app instead of physical transaction. This has led to virtualisation of business models. In addition, to keep business up and running in a work from home scenario, technology is gaining traction. As a result, new age technologies like cybersecurity (to protect business from work from home scenario), app development (to help customer transact virtually) and Cloud (to enable...

Revenue in the quarter was driven by UK government and US retail. While the UK private sector was flat in the current quarter, Mastek believes the UK private sector has bottomed out. Hence, with traction in UK government revenues, US retail and UK private sector, we expect the company to register improving revenues in coming quarters. In addition, Evosys expertise in Oracle cloud migration coupled with Mastek's capability to cross-sell data analytics, application support and digital commerce will help the company win integrated and larger deals. This will result in multi-million...

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...

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...

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...

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...