Buy Mastek; target of Rs 3030: Sharekhan

Sharekhan's research report on Mastek

Mastek expects a 40-50% growth in UK healthcare revenue next year, driven by the new government’s modernisation plan and increased AI and data investments, despite short-term decision-making delays stemming from the NHS England merger with the DHSC. Company is streamlining its North American operations, increasing Data & AI investments, and targeting both tier-2 ($1-10 billion revenue) and Fortune 500 customers along with focus on Healthcare and Manufacturing verticals. Margins are expected to face short-term pressure from new UK healthcare contracts and North America reorganization costs, but AI efficiencies and refined go-to-market strategy aims to restore profitability in 12-36 months.

Outlook

We reiterate Buy with unchanged PT of Rs 3,030. At CMP, the stock trades at 19.9/18/15.3x its FY25/26/27E EPS.