Mastek shares rally 13% on strong Q4 numbers. Should you buy this Sunil Singhania stock?

Produced by: Harshita Tyagi
Designed by: Mohsin Shaikh

Shares of Mastek Ltd rallied more than 13% on Thursday after the company's fourth-quarter earnings beat analysts' estimates. The company's March quarter consolidated revenue surged 7% on a sequential basis to Rs 709.2 crore

Mastek share rally

Mastek stock was trading 13.4% higher at Rs 1,800.85 per share at around 11:30 am. Mastek shares have gained around 10% in the last five days and 5% in the last six months

Mastek share price

The stock is trading at 14.6/11.7 times FY24/25E, said domestic brokerage house HDFC Securities, recommending a 'Add' call with a target price of Rs 1,930 based on 15 times Dec-24E EPS

Should you buy
Mastek shares?

Mastek Board has recommended a final dividend of 240% or Rs 12 per equity share for fiscal ended March 31, 2023. The dividend will be paid within 30 days from the date of the Annual General Meeting (AGM), the company said in a filing

Mastek dividend

Mastek reported a strong quarter with a rebound in organic growth (+5.3% QoQ CC), strong order book, and margin expansion. The organic growth of over 5% was led by a revival in the UK government, strong UK private (retail and financial services), and stability in the NHS and Oracle CX business

Mastek Q3 result

Mastek recorded a 13.07% sequential growth in consolidated profit at Rs 72.6 crore for Q4FY23. Revenue for the quarter grew by 7.7% oQ to Rs 709.2 crore with growth across operations. EBITDA margins increased 40 bps QoQ to 17.7%

EBITDA margins increase

Despite macroeconomic uncertainties, the management said, Mastek's pipeline and order backlog continued to increase across countries, account mining is producing returns, and it added 28 new clients in the quarter, taking its total active clients to around 460

Mastek's pipeline increases

As of the end of March 2023, the company has 5,622 employees in total, with 4,036 of them stationed offshore in India and the rest in various on-site locations. As of December 31, 2022, 5,687 persons were employed. Attrition over the previous year was 21.0% in Q4FY23, compared to 23.3% in Q3FY23

Attrition falls YoY

Mastek's order book remains healthy, having improved by 4.1%QoQ CC to $218mn, indicating continuity of organic growth. Mastek said a 12-month order backlog of 1,794.1 crores as of March 31, 2023, reflects a growth of 22.1% in rupee terms and 17.2% in constant currency terms on a YoY basis

Order book healthy

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