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Mastek shares are one of the multibagger stocks in 2021. In last one month, this IT stock has remained under the sell-off heat as the stock has shed near 3 per cent in this period. In fact, the stock has been under consolidation phase after ushering in new year 2022 as Mastek share price in YTD time has plunged from around ₹3040 to ₹2935 levels, logging near 3.5 per cent loss in this period. However, Mastek share price today has surged near 4 per cent and Anand Rathi believes that the consolidation phase is soon going to become history for the multibagger IT stock. It believes that Mastek share price may surge from current ₹2935 levels to ₹3400 levels in long-term.
Speaking on the reason for expecting sharp upside move in multibagger stock's price; Anand Rathi research report says, "Mastek is likely to further accelerate in the US with new leadership. It is also diversifying from greater business concentrations (UK and government)."
On fundamentals that may fuel Mastek Share price rally, the brokerage report says, "Mastek bounced back in Q4 with 4.9% sequential growth and a $194m order backlog, up 25% y/y. Management spoke about sustaining high growth till FY25 while reducing exposure to the UK and government businesses. It will achieve this by scaling up its Enterprise business in the US (new leadership) and Europe, and by acquiring some targets (revenue ~$35m) in the US (in FY23). FY23 fresher hiring targets are up 50% (to 1,000) to support growth. EBITDA margins to be maintained above 20% in FY23."
The brokerage went on to add that Mastek aspires to the top-3 by growth in midcap IT companies. Its strategy is to generate high growth in the US (Retail, Healthcare, Oracle) as it is now subscale there while maintaining focus on its top accounts in the UK. From a tech standpoint, it is Oracle cloud ERP aligned but looking to add a few more complementary alliances like Microsoft, Amazon, UIPAth, SF and Pega to widen service offerings to support larger clients (revenue $2bn+ or Fortune-1000). Client mining was identified as a strategic focus area for growth.
On suggestion to investors in regard to Mastek shares; Anand Rathi report said that one can buy the stock for long-term target of ₹3400 as the brokerage has tweaked its target for the multibagger It stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
