Majesco reports Q2 PAT at Rs 2376 cr; announces Rs 631 cr share buyback

The IT company recorded a consolidated net profit of Rs 2376.54 crore in Q2 September 2020, steeply higher than net profit of Rs 16.79 crore in Q2 September 2019.

The company earned an exceptional income of Rs 3,065.47 crore during the quarter. The income was received from the sale of Majesco's entire stake/ investment in the US Subsidiary pursuant to the merger between the Majesco (US subsidiary) and Magic Merger Sub, Inc., a Delaware corporation.

The merger process between the US Subsidiary and Magic Merger Sub, Inc., was consummated on 21 September 2020 on receipt of the necessary regulatory and statutory approvals and completion of closure conditions. The company received 3,067.97 crore from the stake sale process.

Consolidated total income rose 6.02% to Rs 5.81 crore in Q2 September 2020 from Rs 5.48 crore in Q2 September 2019.

EBITDA declined by 11.51% to Rs 2.46 crore in Q2 FY 21 from Rs 2.78 crore in Q2 FY20. EBITDA margin stood at 42.4% as on 30 September 2020 as against 50.7% as on 30 September 2019.

Profit before taxes and exceptional income fell 9.48% to Rs 2.29 crore in Q2 September 2020 compared with Rs 2.53 crore in Q2 September 2019.

Total tax expenses in Q2 FY21 were at Rs 725.77 crore. The company had written back taxes worth Rs 4.43 crore in Q2 FY20.

Meanwhile, the company's board approved a proposal of buyback of shares worth upto Rs 631 crore. Majesco proposes to buyback upto 74,70,540 fully paid equity shares of Rs 5 each of the company, representing 25% of the total paid-up equity capital of the company as on 30 September 2020) at a price of Rs 845. Majesco expects share buyback to be completed by December, subject to necessary approvals.

Promoters held 36.77% stake in Majesco as on 30 September 2020.

Majesco provides technology, expertise, and leadership that helps insurers modernize, innovate and connect to build the future of their business - and the future of insurance - at speed and scale.

The scrip fell 3.15% to Rs 820.45 on the BSE. It traded in the range of 804.80 and 873 so far during the day.

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