Buy Datamatics Global Services; target of Rs 1130: Choice Institutional Equities

Choice Institutional Equities's report on Datamatics Global Services

We interacted with the management team of Datamatics Global Services Ltd (DATA) comprising Mr. Rahul Kanodia, Vice Chairman & CEO, Mr. Ankush Akar, SVP & CFO, and Mr. Mitul Mehta, CMO. Key takeaways from the meet are; (1) Digital Operations business has scaled up meaningfully following the TNQTech acquisition, (2) The early-mover investments in AI, GenAI and Agentic AI are now translating into better traction within Digital Technology business (3) DATA’s strategy remains focussed on mid-sized client organizations with niche vertical leadership and enterprises undergoing business transformation. (4) The company serves over 300 active clients and sees significant growth opportunities in the US and Europe — with top client presence across BFSI, Publishing & Proctoring (Customer Experience), Retail and Logistics verticals. (5) DATA is actively scaling net-new client additions to lower concentration risk and strengthening its enterprise platform play through Microsoft, AWS, and newly added Salesforce capabilities via Dextara. (6) It plans to invest INR 400–500Mn annually in innovation to stay ahead of evolving technology landscape, while driving cost optimization to sustain profitable growth.

Outlook

We believe DATA’s niche vertical strengths, AI-driven execution and disciplined focus on profitable growth position it well for sustained performance. We maintain BUY rating with an unchanged TP of INR 1,130.

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