Buy Mastek; target of Rs 3332: Anand Rathi

Anand Rathi is bullish on Mastek has recommended buy rating on the stock with a target price of Rs 3332 in its research report dated July 22, 2025.

Broker Research

July 23, 2025 / 13:28 IST

buy

26 Aug, 2025 12:21

Volume

Todays L/H

Anand Rathi's research report on Mastek

Mastek’s Q1FY26 performance highlights ongoing execution challenges in NA and AMEA, with CC revenue declining -1.1% q/q, reflecting transition issues coupled with Payer and Retail-client-specific concerns in the US. Strong growth (~10% q/q) and resilient operating margins (310bps q/q) in the UK and Europe were driven by the UK government and UK NHS despite renewal with the largest client at discounted pricing. Management assuaged concerns regarding the US and AMEA highlighting the strong US order book (~25% q/q & y/y growth) coupled with appointment of an AMEA head, a seasoned Cerner healthcare alum, who will drive growth combining Mastek's’ traditional Oracle ability with Cerner experience. The overall margin trajectory is stable to positive. Mastek will firmly benefit from macro tailwinds with the UK government’s focus on preventive healthcare, digital technology & infra, Defence and cybersecurity. The appointment of a CFO and a North America head are immediate imperatives.

Outlook

We retain our Buy recommendation on the stock, with FY27e/FY28e P/E of 18.5x/15.8x (vs. the last 5-year avg. of the one-yr-fwd. ~21.4x) and a 14% EPS CAGR over FY26e-28e. Our target price is Rs.3,332, implying 25.8% potential upside to the CMP.

For all recommendations report, click here