Share of Mastek Limited has delivered 514 per cent return to its shareholders in the last 12 months. The share stood at Rs 423.55 on July 20, 2020. It has zoomed to Rs 2,600 today, translating into gains of 514 per cent during the period.
In comparison, Sensex rose 40 per cent in one year. Rs 1 lakh invested in the share a year ago would have turned into Rs 6.14 lakh today.
The stock rose 4.3 per cent to hit an all-time high of Rs 2,600 on BSE today after the company posted healthy June quarter results. The stock has gained 82 per cent in the last three months and risen 122 per cent since the beginning of this year. With a market capitalisation of over Rs 6,300 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
The company posted a net profit of Rs 69.30 crore for the quarter ended June 2021 as against Rs 60.55 crore in the previous quarter ended March 2021. Mastek's dollar revenues grew 6.5 per cent quarter-on-quarter (QoQ) to $70.2 million.
"Mastek has delivered strong results in Q1FY22. The company added 40 new clients in the quarter. OPM Margin stood at 21.84% in June 2021 compared to 17.64% in June 2020. We have seen a strong run-up in the stock price in the last one year so buy on declines around Rs 2200-2300 is the best strategy in the stock for the long term," Akhil Rathi, Vice President Advisory at Marwadi Shares and Finance Limited told BusinessToday.In.
According to MarketsMojo, the stock is trading at a premium compared to its average historical valuations. The technical trend has improved from Mildly Bullish on July 7, 2021, and the stock is technically in a Bullish range now and has generated a 13 per cent return since then. Multiple factors for the stock are Bullish like MACD, Bollinger Band, KST, DOW and OBV. It also noted that the company has a high Return on Capital Employed (ROCE) of 31.61% and the stock seems fairly valued at the moment.
Commenting on the Q1FY22 results, Arun Agarwal, Global Chief Financial Officer, Mastek Limited, said: "Q1FY22 has been another quarter of consistent financial performance. We reported Rs 516.5 crore revenue, reflecting a growth of 6.9% sequentially, demonstrating the strong fundamentals of our business in these challenging times."
"Despite an increase in costs due to onshoring, promotions, and investments in talents during the quarter, we have been able to maintain a healthy operating EBITDA margin of 21.8%. We continue to maintain the healthy free cash flow of Rs 115.4 crore during the quarter," he noted.
"We are confident that with increasing demand for digital services, strong order backlog, and strategic investments, we are well placed to sustain the growth momentum, create values for our customers, and maximize value for our shareholders," he added.
The company informed that the 12-month order backlog stood at Rs 1,177.7 crore as on 30th June, 2021 as compared to Rs 1,130.4 crore in Q4FY21, reflecting a growth of 4.2% in rupee terms and 2.1% in constant currency terms on a quarter-on-quarter basis and Rs 764.5 crore in Q1FY21, reflecting a growth of 54.0% in rupee terms and 45.5% in constant currency terms on Y-o-Y basis.
Mastek enables large-scale business change programmes through its service offerings, which include Application Development, Oracle Suite & Cloud Migration, Digital Commerce, Application Support & Maintenance, BI & Analytics, Assurance & Testing, and Agile Consulting.
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