Buy Mastek; target of Rs 3610: Sharekhan

Sharekhan's research report on Mastek

Reported revenues stood at $102.9 million, up 0.1% q-o-q/7.6% y-o-y in CC terms, missing our estimates of $104.8 million. Reported revenue was impacted by currency fluctuations. EBITDA margin fell ~30 bps q-o-q to 16.2% impacted by wage hike but beat our estimates of 15.9%. Twelve-month order backlog was Rs 2,138.7 crore, up 3.4%rupee terms and 1.5% in CC. Management expects steady growth in US in quarters ahead, with full growth potential to be realized from the first half of the next year.

Outlook

We maintain a Buy with unchanged PT of Rs. 3,610. At CMP, the stock trades at 23.6/21.3/18.2x its FY25/26/27E EPS.

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