Mastek share price snaps 5-day losing run, surges 19% on heavy volumes

Mastek share price: The stock snapped its five-day losing streak, having fallen 12.32 per cent during the period

Mastek share price was buzzing in trade on Tuesday, March 18, 2025, as investors rushed to buy the stock after five consecutive days of declines.

 

Mastek zoomed 18.8 per cent on the BSE in Tuesday's intraday trade to hit a high of Rs 2,511.9 per share. The stock snapped its five-day losing streak, having fallen 12.32 per cent during the period. At 1:55 PM, the stock of the software firm was ruling near the day's high level of Rs 2,494 per share (up 18 per cent) as against a 1.2 per cent rise in the benchmark BSE Sensex index.

 

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Around 81,000 shares have, thus far, changed hands on the counter on the BSE as against a two-week average of 9,876 shares. Combined with the volume on the National Stock Exchange (NSE), 3.737 million shares have changed hands on the counter.

 

Mastek is a software and cloud transformation firm that serves across 40 countries, including the UK, Europe, the US, Middle East, Asia Pacific, and India.

 

Recently, it was named as a supplier on the UK Crown Commercial Service's RM6345 Digital Capability for Health 2 (DCfH 2) framework, to support the digital transformation programme in the health and social care sector.

 

"This framework will provide Health and Social Care organisations with access to Mastek's expertise in delivering agile development services for new digital solutions, supporting existing products and services, and offering data management services – including health data collection, processing, and distribution," it said in a statement.

 

The contract follows Umang Nahata's appointment as the new chief executive officer (CEO) of the company, for a period of five years, starting January 2025.

 

Nahata, as per analysts, is set to lead the company into its next phase of growth by focusing on the UK market and revitalising the US and AMEA geographies.

 

His strategy, as per a HDFC Securities report, emphasises leveraging the robust momentum in the UK market, aiming for mid-teens growth through increased digital spending in healthcare (NHS) and defence, and expanding within the home office department. In the US, Mastek plans to rebuild its presence by enhancing AI and data engineering capabilities, focusing on managed services engagements, enhancing the sales incentive structure and fostering strong customer relationships. The restructuring of the AMEA region, meanwhile, aims to improve margins and focus on scalable accounts, targeting high single-digit growth and stable margins.

 

"Given this, we believe the US growth will take time to recover but the US margins will be stable, and the Middle East restructuring will continue for 1-2 quarters more. The margin recovery will start from Q4FY25 and expand ~90-100bps to reach 17.1 per cent over the next two years, driven by organic growth revival led by higher margin UK geography," the brokerage said in a February report.

 

Though the brokerage has cut its US and AMEA growth estimates, along with the earnings per share (EPS) estimates for FY26/27 by 2-3 per cent, it expects the company to deliver over 12 per cent and 17 per cent revenue and EPS CAGR over FY24-27E (vs 14 per cent and 20 per cent earlier). It maintained its 'Add' rating on Mastek stock with a share price target of Rs 3,100, based on 20x FY27E EPS.

 

Meanwhile, rating agency ICRA has reaffirmed Mastek's credit ratings on long-term and short-term debt instruments, factoring in its established business position in the information technology (IT) and IT-enabled services (ITeS) industry, its presence across key  global markets and business segments and long relationships with a reputed client base.

 

"In  FY24, Mastek witnessed a healthy Y-o-Y revenue growth of 13.0 per cent in constant currency (CC) terms, relatively higher than its industry peers, primarily driven by consolidation of the recent acquisitions. However, Mastek's Y-o-Y revenue growth moderated to 10.6 per cent (USD terms) to $303.7 million in 9MFY25. Nonetheless, the company is expected to report a steady growth over the near term, supported by its healthy order book position, acquisition synergies, and increasing revenue contribution from the US market in its core verticals," ICRA said.

 

While the agency said Mastek's ratings remain constrained by its high revenue dependence on the UK's public and healthcare sectors, exposing it to the risk of changes in the UK Government's policy on IT spending, the risk is mitigated to an extent as Mastek has an  established track record of several decades in serving the UK public sector for critical IT projects.