Mehabe score: 5 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:MASTEK Main Symbol:MASTEK
Stock trades at 2852.0, below its 50dma 2953.69. However it is trading above its 200dma 2478.19. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 2953.69.
The 52 week high is at 3669.00 and the 52week low is at 1065.00
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 9.98 times its book value
-Promoter holding has decreased over last quarter: -6.50%
Competition
– The industry trades at a mean P/E of 38.6x. Tata Elxsi trades at the industry’s max P/E of 90.77x. MASTEK trades at a P/E of 32.7x
– Industry’s mean G-Factor is 3.2 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 4.2%. The max 1- month return was given by Tata Elxsi: a return of 28.39 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 552.0 cr compared to Rs 443.0 cr for period ended Dec 2020, a rise of 24.6% .
vis-vis 104.0 for period ended Dec 2020 .
Operating Margins contracted -246.2 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 116.0 cr for period ended Dec 2021 and operating profit margin at 21.0 % for same period.
The EPS for quarter ended Dec 2021 is Rs 24.77 compared to Rs 24.38 for previous quarter ended Sep 2021 and Rs 23.03 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2086.0 cr for period ended TTM vis-vis sales of Rs 1722.0 cr for the period ended Mar 2021, a healthy growth of 17.4%. The 3 year sales cagr stood at 26.4%.
Net Profit reported at Rs 276.0 cr for period ended TTM vis-vis sales of Rs 209.0 cr for the period ended Mar 2021, rising 24.3%.
Company recorded a healthy Net Profit CAGR of 39.8% 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 179% on a 1 Year basis vis-vis a return of 97% over the last 3 Years. – The compounded sales growth on a TTM bassis is 44% vis-vis a compounded sales growth of 28% over the last 3 Years. – The compounded profit growth on a TTM basis is 57% vis-vis a compounded profit growth of 45% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 4.84% vis-vis 4.16% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 50.35% vis-vis 50.1% for Sep 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 9.98 times its book value
-Promoter holding has decreased over last quarter: -6.50%
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 below its 50 DMA 2953.69 and is trading at 2852.0. Shows a near term lack of buying interest.
