Mehabe score: 8 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Established in 1982, Mastek is a provider of vertically-focused enterprise technology solutions. Having its presence in IT industry for almost 4 decades, Mastek Ltd has evolved from an IT solutions provider to Digital transformation partner.[1]Site:MASTEKMain Symbol:MASTEK
Stock trades at 3438.0, above its 50dma 2745.71. It also trades above its 200dma 1986.32. The stock remains bullish on techicals
The 52 week high is at 3234.90 and the 52week low is at 770.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has delivered good profit growth of 74.22% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 18.47%
Weakness
– Stock is trading at 10.17 times its book value
Competition
– The industry trades at a mean P/E of 29.8x. Happiest Minds trades at the industry’s max P/E of 134.32x. MASTEK trades at a P/E of 36.7x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 9.0. MASTEK has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 10.1%. The max 1- month return was given by Persistent Sys: a return of 18.69 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 534.0 cr compared to Rs 410.0 cr for period ended Sep 2020, a rise of 30.2%
Operating Profits reported at Rs 113.0 cr for period ended Sep 2021 vis-vis 87.0 for period ended Sep 2020 .
Operating Margins contracted -5.8 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 28.45 compared to Rs 27.42 for previous quarter ended Jun 2021 and Rs 20.76 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1976.0 cr for period ended TTM vis-vis sales of Rs 1722.0 cr for the period ended Mar 2021, a healthy growth of 12.9%. The 3 year sales cagr stood at 24.1%.
Operating margins expanded to 22.0% for period ended TTM vis-vis 21.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 260.0 cr for period ended TTM vis-vis sales of Rs 209.0 cr for the period ended Mar 2021, rising 19.6%.
Company recorded a healthy Net Profit CAGR of 37.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 287.0 cr for period ended Mar 2021 vis-vis Rs 184.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 25.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 326% on a 1 Year basis vis-vis a return of 98% over the last 3 Years. – The compounded sales growth on a TTM bassis is 53% vis-vis a compounded sales growth of 28% over the last 3 Years. – The compounded profit growth on a TTM basis is 71% vis-vis a compounded profit growth of 45% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 5.67% vis-vis 6.51% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 39.36% vis-vis 37.19% for Mar 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has delivered good profit growth of 74.22% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 18.47% – Stock is trading at 10.17 times its book value
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 2745.71 and is trading at 3438.0, thus bullish price action wise.
