Sharekhan has given Buy recommendation for Mastek with a target price of Rs. 3840 in its research report issued on Sep 17, 2021

Sharekhan’s research report on Mastek

Though deal closures can be delayed in the UK NHS by a few months, overall order bookings would remain strong given higher digital adoption in other UK government departments. Mastek has qualified for seven deals in the new digital capability framework of NHS. Mastek aims to double its revenue over the next three years, implying a strong 26% CAGR versus our estimates of 22%. Management aspires to clock $1 billion revenue by the second half of this decade, versus the current revenue run-rate of $281 million. Mastek is expected to clock earnings CAGR of 27% over FY2021-FY2024E, led by strong growth in the UK public sector, strong deal wins, logo additions and expansion in the US markets.

Outlook

We maintain a Buy on Mastek with a revised PT of Rs. 3,840, given strong earnings growth potential, a robust deal pipeline, improving deal sizes, and strong demand.

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