Updated: Sep 23, 2022
Promoters have been buying around ₹ 2500-2600 levels
52-week range: ₹ 1750 – ₹ 3669
Current Price: ₹ 1758 (Sep 23, 2022)
Summary:
Mastek is a global software solutions and systems integration service provider which designs, develops, integrates, and maintains business applications. Mastek acquired Evosys in Feb 2020, a trusted Oracle Partner with more than 2,000 experienced consultants and 1,200 Oracle Cloud customers. Mastek acquired TAISTech, Oracle ATG, and Oracle Commerce Cloud consulting.
Quick Facts:
- Around 5000 employees.
- Strong track record in the Government, Health, and Retail verticals.
- Successful relationships with UK Government Department.
- Inorganic expansion through Evosys.
- Evosys is on Oracle’s SAP Replace campaign.
- Evosys is named in Gartner for Oracle Cloud Applications Services.
- Oracle Platinum Partner.
- 1200+ Oracle Cloud clients.
- Won a healthcare contract worth EUR40mn from the UK government.
Competitors:
- Accenture, Deloitte, PWC, IBM, Infosys, Wipro, TCS.
Revenue:
- Around 35% revenue from Oracle Cloud.
- Revenue Mix: Top 5 (28.5%), Top 10 (44.4%).
- Revenue Mix: UK & Europe (66.3%), US (18.5%), Middle East (9.2%).
- Revenue Mix: Government & Education (38%), Health & Life Sciences (24%), Retail/Consumer (14.4%), Manufacturing (9.7%), Financial Services (9%).
- 72% of its revenues from Government, Health, and Retail.
Risks:
- Client concentration: 45% of its revenues from its top 10 clients.
- Any top client exit may have an adverse impact on its revenues and profitability.
- Geography concentration: 66% of its revenues from the UK & Europe.
- Any slowdown in the UK & Europe region may have an adverse impact on its revenues and profitability.
- Integration with Evosys could be a challenge.
- Attrition rates are high at 24%
Negatives:
Even though Mastek was founded in 1982, a year after Infosys, Mastek could not replicate the success of Infosys. Mastek is still a small company.
10-Year Data:
Management:
- Mr Hiral Chandrana is the Global CEO of Mastek. He has over 25+ years of global experience in IT Services. He has worked with Wipro.
- Mr Umang Nahata heads the Global Oracle business at Mastek. He is the co-founder and CEO of Evosys.
Investors:
- Promoters hold 37.59% of the company
- MFs hold 2.55% of the company
- Abakkus Fund holds 4.19% of the company
- Mukul Agarwal holds 1.05% of the company
Ashank Desai, promoter of Mastek, has been buying Mastek in the market from 24/Jan to 11/Feb. Ashank paid a high price.
Valuation:
- Historically, Mastek traded around P/E of 15x, and the current P/E is 17.4.
Note: The growth rate assumption for the DCF can go wrong.
Resources:
- Annual Reports, Investor Presentations, Gartner
Recent Developments:
Oct 2021:
Mastek appoints Hiral Chandrana as Global Chief Executive Officer.
Read more: Group CEO Announcement
Jan 11, 2022:
Mastek appoints Prajakta Talvelkar as Global Head of Marketing & Partnerships
Read more: Global Head of Marketing Appointment
Jan 28, 2022:
Mastek appoints Ritwik Batabyal as Chief Technology and Innovation Officer
Read more: CTO Appointment
Feb 07, 2022:
Mastek appointed Damien Venkatasamy, Vivek Chopra and David O’Brien as subsidiary board members.
Read more: Mastek Subsidiary Board Appointment
Disclaimer:
For educational purposes only.
Appendix:
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