Mastek drops on profit booking

Mastek lost 5.46% to Rs 311.50 at 11:15 IST on BSE, with the stock declining on profit booking after steep recent rally.

Meanwhile, the BSE Sensex was down 70.60 points, or 0.26%, to 26,710.84

On BSE, so far 2.47 lakh shares were traded in the counter as against an average volume of 1.26 lakh shares in the past one quarter.

The stock hit a high of Rs 331 and a low of Rs 298.60 so far during the day. The stock hit a 52-week high of Rs 363.20 yesterday, 16 December 2014. The stock hit a 52-week low of Rs 134 on 1 December 2013.

The stock had outperformed the market over the past one month till 28 November 2014, rising 17.26% compared with the Sensex's 4.51% fall. The stock also outperformed the market in past one quarter, gaining 7.61% as against Sensex's 1.09% rise.

The small-cap IT firm has an equity capital of Rs 11.19 crore. Face value per share is Rs 5.

Shares of Mastek were on a roll recently, surging 27.76% in four trading days to settle at Rs 329.50 on 16 December 2014 from recent low of Rs 257.90 on 10 December 2014. The gains caught momentum after the company's wholly owned subsidiary Majesco announced plans to merge Cover- All Technologies with itself and to list Majesco on the NYSE. The announcement was made during trading hours on Monday, 15 December 2014.

Majesco (formerly, MajescoMastek), the global provider of core insurance systems and services to approximately 100 insurance carriers worldwide, on Sunday, 14 December 2014 announced that it has entered into a definitive merger agreement with Cover-All Technologies Inc., an insurance software company based in Morristown, NJ, in a 100% stock-for-stock transaction, pursuant to which Cover-All's stockholders and the holders of its options and restricted stock units, in the aggregate, will, upon the closing of the merger, receive 16.5% of the outstanding shares of common stock of the combined company, on a fully diluted basis. The combined entity will retain the Majesco brand globally.

Majesco, formerly known as Majesco Mastek is the insurance arm and a wholly owned subsidiary of Mastek.

The decision to merge the two businesses is the latest step in the execution of Majesco's aggressive growth strategy to consolidate its global insurance business under a single and separate entity. Last week, Majesco had announced the signing of a definitive agreement to acquire the insurance business of Agile Technologies, LLC, bringing additional IT consulting, data strategy and implementation expertise to Majesco.

The merger with Cover-All broadens Majesco's capability and reach in servicing current and future customers, Mastek said.

The transaction is subject to customary closing conditions, including the filing and effectiveness of a registration statement with the Securities and Exchange Commission, Cover-All stockholder approval, certain regulatory approvals and that the shares of Majesco common stock be listed on the NYSE MKT. The transaction is expected to close in the second quarter of 2015. Both companies will continue to operate as independent entities until then, Mastek said in a statement.

Mastek's consolidated net profit jumped 104.7% to Rs 1.74 crore on 10.61% rise in total income to Rs 251.74 crore in Q2 September 2014 over Q1 June 2014.

Mastek is a publicly held leading IT player with global operations providing enterprise solutions to insurance, government, and financial services organizations worldwide.

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