Mastek’s Stock Gains on Positive Outlook from Macquarie

Mastek’s shares rose by 2% on October 31, reaching Rs 2,893 in morning trade after Macquarie reaffirmed its ‘outperform’ rating on the stock

Mastek’s shares rose by 2% on October 31, reaching Rs 2,893 in morning trade after Macquarie reaffirmed its ‘outperform’ rating on the stock. Following the company’s second-quarter earnings report, Macquarie raised its price target to Rs 3,320, suggesting an upside potential of 17.3% from the previous closing price of Rs 2,830 on the National Stock Exchange. The positive market response reflects confidence in Mastek’s strategic decisions, particularly its recent acquisitions, which have contributed significantly to its financial performance. Despite broader market fluctuations, the company has seen a modest rise of just over 1% in its shares since the beginning of the year. Mastek’s Q2 FY25 results were robust, marking its best performance since Q4 FY23.

North American revenue increased by 17.3% quarter-over-quarter (QoQ) and 11.1% year-over-year (YoY) in U.S. dollar terms, showing the company’s strengthened presence in the region. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew by 125 basis points QoQ and 40 basis points YoY despite some impacts from wage adjustments. Revenue from operations climbed by 13.3% YoY, reaching Rs 867.4 crore, compared to Rs 765.5 crore in the same quarter last year. Operating EBITDA also rose by 16.3% YoY to Rs 143.1 crore, with the EBITDA margin increasing from 15% to 16.5%. Additionally, Mastek added 14 new clients in Q2 FY25, although its active client base dipped slightly to 380 from 391 in the prior quarter. This shift reflects the company’s focus on more bottomless account mining and higher revenue per client, indicating a strategic emphasis on maximizing value from existing relationships.