Buy Mastek; target of Rs 2400: Sharekhan

Sharekhan is bullish on Mastek has recommended buy rating on the stock with a target price of Rs 2400 in its research report dated July 19, 2023.

Broker Research

July 20, 2023 / 17:59 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on Mastek

Revenue stood at $88.1 million, up 0.4% q-o-q/20.2% y-o-y in constant currency (cc), in line with our estimate of $88 million. Revenue from operations stood at Rs 725.3 crore, up 2.3% q-o-q/27% y-o-y. EBITDA margin stood at 17.5%, down 20 bps q-o-q. The 20-bps reduction was largely due to increments which was offset by currency and other operating levers. 12-month order backlog stood at Rs 1,763.9 crore ($215 million), down 2.6% q-o-q /up 9.7% y-o-y in cc. The Company added 22 new clients in Q1FY24. LTM attrition rate at 20.4% moderated by 60 bps q-o-q. Utilisation (including trainees) improved to 77.6% from 73.8% in Q4FY23, up 380 bps. Despite the near-term challenges and uncertainty, we believe the company is well-positioned on account of their comprehensive portfolio, strong UK public sector relationships, momentum in the Americas and Middle East which give them the confidence to achieve stronger and industry-leading growth.

Outlook

Hence, we upgrade the stock to Buy with a revised price target of Rs 2400. At the CMP the stock trades at 20.6/16.2x its FY24/25E EPS.

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