HDFC Securities is bullish on Majesco has recommended buy rating on the stock with a target price of Rs 550 in its research report dated May 10, 2017.
HDFC Securities' research report on Majesco
Majesco posted weak numbers again in 4Q, with a 6.7% QoQ USD revenue decline (USD 28.2mn vs. est USD 30.0mn), led by a continuous shift in client preferences (on-premise to cloud), a very low licence component in cloud deals and client-specific issues (L&A).
Majesco now stands at a juncture where it has to deliver on its promises. Our positive stance on Majesco is based on (1) Huge addressable opportunity both in L&A and P&C, (2) IBM partnership and (3) Gradual ramp-up in cloud revenues. We cut our revenue estimates by 4.0/3.4% for FY18/19E, owing to the 4Q miss. Maintain BUY with a TP of Rs 550, based on 1.8x FY19E EV/revenue multiple.
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