Buy Majesco; target of Rs 375: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on Majesco

Majesco posted better than expected revenue and margin performance in 4QFY20. Revenue growth was led by +5.3/+25.0% QoQ/YoY growth in Products revenue (Cloud subscription + Licence + AMC), while Services revenue (Cloud implementation + On-prem + Professional Services) was down 0.5/9.3% QoQ/YoY. Majesco has now positioned itself as a pure-play Products company and is focussing on driving growth through SI partnerships. The first phase of the Metlife project went live and will act as a reference point for future deals. Impact of COVID-19 was felt on deal signings, some of the deals in pipeline got deferred by 1-2 quarters. EBIT margin expansion was healthy, supported by higher-margin cloud subscription revenue.

Outlook

FY21/22E USD revenue est. remains unchanged, and TP of Rs 375 implies EV/rev multiple of 1.0x on FY22E rev. Maintain BUY.

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