Buy Majesco; target of Rs 680: Dolat Capital

Dolat Capital is bullish on Majesco has recommended buy rating on the stock with a target price of Rs 680 in its research report dated July 21, 2020.

Broker Research

July 21, 2020 / 18:11 IST

26 Aug, 2025 12:21

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Dolat Capital's research report on Majesco

Majesco India sold its US listed operating entity (owns 74% economic interest) to a PE entity valuing the company at US$594mn. The transaction would mean the company would exit its entire operating unit and thus would use the entire proceeds of about Rs850 per share its shareholders. The sell-out was on expected line as company did all the necessary actions (Rights issue in US to transfer cash from India to operating entity, additional stake purchase from Mastek, selling Asia-region business to its US-subsidiary) that were ideal for the transaction to get consummated over last few quarters. We believe the significant-premium on the deal valuation is a classic example of what opportunity any cloud based IP-business can achieve given the potential acceleration theme and further reinforce our positive view in the space.

Outlook

We expect the stock to trade about 20% discount (towards tax & time value) to cash-per-share at about Rs680 and would inch higher as more clarity emerges on distribution route and time-lines and maintain our Buy rating on the stock with a similar TP (Target price implies 19x on FY22 earnings).