ICICIDirect downgrades this Sunil Sighania stock, others see up to 45% rise; check details

One of Sunil Singhania's multibagger stocks has been downgraded by ICICIDirect Research post a muted Q3 performance, while other brokerage firms continue to remain positive on the counter, with a strong upside potential of around 45 per cent, led by healthy order book and healthy margins. The stock has surged over 1,100 per cent in less than six years.

We are talking about Mastek, a global provider of enterprise AI, digital, and cloud services. It offers data, apps, cloud services to public and private enterprise, catering to government and education; health and lifesciences; retail/consumer; manufacturing & technology; and financial service sectors.

Mastek Ltd reported a 11.2 per cent YoY jump in the net profit at Rs 108.35 crore, while revenue rose 4.15 per cent YoY to Rs 905.68 crore for the December 2025 quarter. The IT solutions provider's ebit was flat at Rs 128 crore, while margins stood at 14.1 per cent. The company board of Mastek also announced a dividend of Rs 8 per share, with January 30, 2026 as the record date for it.

While Q3 revenues were impacted by higher-than-expected furloughs (in UK & some public sector customers globally) and project right-shifts. Mastek’s accelerated investments in AI-led digital engineering are translating into tangible productivity gains for clients, with management citing 15–80 per cent efficiency improvements across engagements, said ICICIDirect Research.

Mastek reported a weak Q3FY26, impacted by higher-than-expected furloughs, primarily in the UK Secure Government Services (SGS) segment, delays in ramp-ups, and ongoing restructuring in the Middle East. Despite the revenue decline, Ebitda margin improved 60 bps QoQ, aided by AI-led efficiency gains, said HDFC Securities.

While Mastek reported a soft top-line in Q3FY26, its margin expanded by 120 bps QoQ. CC revenue declined 4.8 per cent QoQ to $102 million, owing to higher furloughs, planned project go-lives in the US & AMEA and right-shifting of few engagements, said Anand Rathi Share & Stock Brokers.

Shares of Master settled at Rs 2,111.60 on Thursday, falling 2.90 per cent for the day. The stock has tumbled more than 25 per cent from its 52-week low at Rs 2,817.75, hit in July 2025, while it is down 17 per cent in the last six months. Despite this fall, the stock has surged more than 1,100 per cent from its covid-19 lows around Rs 175, hit six years ago.

Sunil Singhania's PMS Abakkus Asset Managers owned 8,59,220 equity shares, or 2.77 per cent stake in the company as of December 2025 quarter, which is valued at Rs 181.43 crore as of Wednesday's close. However, he trimmed his stake compared to the September 2025 quarter, when he owned 8,84,220 equity shares, or 2.85 per cent, stake in the company.

"Management highlighted that a large part of the revenue miss was timing-related, with several programs scheduled to commence from Q4. It has guided to maintain margins in the band of 16.5-17 per cent. We model Ebitda margins at 15.7 per cent/16.3 per cent/16.5 per cent for FY26E/FY27E/FY28E," ICICIDirect said.

"Given a weaker than expected revenue growth trajectory, we turn cautious & expect a gradual topline growth recovery of 7 per cent/11 per cent YoY in FY27E/FY28E. We downgrade to 'hold' valuing it at revised multiple of 15 times P/E on FY28E EPS, with target price of Rs 2,380. We shall wait for any meaningful growth in both revenue and margins to turn constructive," it adds.

The US leadership changes are over and with order bookings of $30 million, management believes the worst is behind. The UK government remains the key focus area and it is building AI led data engineering capability and delivering 15 per cent efficiency gains to clients, HDFC Securities said.

"Management expects growth to accelerate with an Ebitda margin target of 16.5-17 per cent. However, considering macro uncertainty, delayed ramp-ups, and AI-driven pricing pressure in select SGS accounts, we trim our FY27/28E EPS estimates by 3-5 per cent," it added with a 'buy' rating and a target price of Rs 3,100.

"Geographically, revenue was UK-heavy, as it remains the key stabiliser amid seasonal weakness. North America and MEA faced the brunt of project timing and ramp shifts. Notably, execution discipline and AI-led efficiencies supported profitability. Q3 weakness is largely timing-driven rather than a pipeline deterioration," Anand Rathi said with a 'buy' rating and target price of Rs 2,885.