Anand Rathi has given Buy recommendation for Mastek with a target price of Rs. 3400 in its research report issued on Apr 22, 2022

Anand Rathi’s research report on Mastek

Mastek bounced back in Q4 with 4.9% sequential growth and a $194m order backlog, up 25% y/y. Management spoke about sustaining high growth till FY25 while reducing exposure to the UK and government businesses. It will achieve this by scaling up its Enterprise business in the US (new leadership) and Europe, and by acquiring some targets (revenue ~$35m) in the US (in FY23). FY23 fresher hiring targets are up 50% (to 1,000) to support growth. EBITDA margins to be maintained above 20% in FY23.

Outlook

We largely retain our FY23e/FY24e, but tweak our target to Rs.3,400 (23x FY24e, a 35% discount to LTI). We retain a Buy recommendation.

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