Buy Mastek, target price Rs 2280: AnandRathi

AnandRathi has buy call on Mastek with a target price of Rs 2280. The current market price of Mastek is Rs 1635.

Mastek, incorporated in the year 1982, is a Small Cap company (having a market cap of Rs 4896.18 Crore) operating in IT Software sector.

Mastek key Products/Revenue Segments include I T Services for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 632.21 Crore, up 6.07 % from last quarter Total Income of Rs 596.01 Crore and up 16.72 % from last year same quarter Total Income of Rs 541.64 Crore. Company has reported net profit after tax of Rs 86.20 Crore in latest quarter.

The company’s top management includes Mr.S Sandilya, Mr.Ashank Desai, Ms.Priti Rao, Mr.Atul Kanagat, Mr.Rajeev Grover, Mr.Ketan Mehta. Company has Walker Chandiok & Co. LLP as its auditors. As on 30-09-2022, the company has a total of 3 Crore shares outstanding.

Investment Rationale
The company is now stabilizing with drags in healthcare behind, Metasoftech fully integrated from Q3, raising the US contribution to ~27%, and cross-currency turning supportive. While Q3 would be stable, growth is likely to improve from Q4. With annual increments and the worst of attrition behind, EBITDA margins should improve gradually.

Promoter/FII Holdings
Promoters held 37.28 per cent stake in the company as of 30-Sep-2022, while FIIs owned 8.01 per cent, DIIs 3.73 per cent.