Shares of Mastek moved higher by 14 per cent to Rs 431 on the BSE in the afternoon deals on Monday, ralling 20 per cent in the past two trading days.
The company, on Friday, said it's wholly owned subsidiary Mastek (UK) has sold partial stake in Majesco to drive growth strategy. The software services provider plans to divest the remaining stake.
“Mastek (UK) off-loaded about 2 million shares in Majesco USA for US $15.94 million and the balance of 3.04 million is intended to be sold in ensuring future,” the company said in a stock-exchange filing.
The net proceeds from the sale will be reinvested into the growth of Mastek as a part of its committed Vision 2020 strategy, it added.
The stock also rallied amid hopes that the Brexit could happen by January as exit polls predicted a big win for Prime Minister Boris Johnson is the UK election.
“Mastek has been strengthening its executive team, three new additions in past eight months. We believe these are strategic initiatives for driving growth. We like Mastek’s initial success in recovering US business and managing the Brexit uncertainty. Mastek will benefit (margin lever) from the off-shoring opportunity (around USD 20 million) arising with UK public sector given its long term relationship with UK government and limited competition from Indian IT,” analysts at HDFC Securities said in Q2FY20 results review.
At 02:32 pm, Mastek was trading 12 per cent higher at Rs 423 on the BSE. In comparison, the S&P BSE Sensex was up marginally by 0.06 per cent at 41,035 points. The trading volumes on the counter more than doubled with a combined 1.5 million shares changing hands on the NSE and BSE till the time of filing of this report.