Mastek Limited shares continued to rise on Thursday after the company announced its plan to acquire a US-based cloud data and AI firm, BizAnalytica LLC. The shares were up 0.5 percent at Rs 2,171 at 9.17 am on the National Stock Exchange.
In an exchange filing dated July 19, Mastek said its wholly-owned step-down subsidiary, Mastek Inc, will acquire a 100 percent stake in BizAnalytica. This acquisition is expected to enable Mastek to capitalize on the growing market potential in AI, cloud data, and modernization.
Mastek will make an upfront payment of $16.72 million to buy BizAnalytica. Additionally, an earn-out payment between $0 and $24 million will be made, contingent on meeting specific targets. If these targets are achieved within three years, the total earn-out payment will amount to approximately $15.3 million. An earn-out payment serves as additional compensation to the business owner after the sale.
In the April to June quarter, Mastek Limited reported a 27 percent increase in revenue from operations to Rs 725 crore year-on-year. However, the net profit fell 12.8 percent year-on-year to Rs 73 crore in Q1FY24.
During the first quarter of this financial year, the company gained 22 new clients, resulting in a total active client number of 436, which represented a 6 percent decline on a quarter-on-quarter basis. Meanwhile, the order backlog for Q1FY24 was Rs 1763 crore, marking a 16 percent increase year-on-year but a 1.7 percent decline on a quarter-on-quarter basis. Order backlog refers to the orders that the company has won but are yet to be realised.
Mastek Limited operates as a digital engineering and cloud transformation company, offering solutions to clients in healthcare, life sciences, retail, manufacturing, financial services, and government sectors.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
