Mastek: E-commerce to drive growth - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Mastek: E-commerce to drive growth

Aug 2, 2000

Mastek Ltd., is a US $ 58 m publicly held global IT solutions company which has been growing at a CAGR of 60% over the last three years. The company has over 7,000 person years of experience achieved through execution of more than 700 project worldwide. The company has recorded excellent financial performance during the year ended June 2000. Its sales increased by 67% and profits by a remarkable 247%. The operating margins have doubled to 36% compared to 18% in June 99. The company is currently focusing on increasing its share of revenues from front-end/e-commerce related services which contributes 44% of revenues. Moving up the value chain will enable the company to expand its margins further.

Mastek generates 58% of its revenues from offshore activities, which earn higher margins. In the next three years offshore revenues are expected to go up to 70% of total revenues. The company has a diversified portfolio geographically where 38% of revenues comes from US, 32% from Europe and 4% form Asia Pacific.

Mastek is taking many new initiatives to beef up its sales and marketing infrastructure. These include focusing on wider coverage of German market, working on new business development in Japan and sustained efforts taken for branding.

In the current year concerns have been raised about Mastek after it announced that one of its top 5 customer was substantially scaling down its business. The impact of this decision will be felt maximum upto December 2000 after which the company is expected to revert to its normal growth levels. This will mean around 10-15% reduction in the company’s revenues in the current year, which it expects to compensate by increasing the revenues from e-commerce activities.

The company’s valuations in the current year have been severely impacted as a result of this concern. The market price of the company has come down by more than 55% from Rs 4,300 on 11th April 2000 to Rs 1,765 now. The stock quotes at a P/E of 43 times its FY00 annualised earnings. The management has clarified that customer’s decision to scale the down the level of services was on account of its strategic restructuring of its IT operations and not because of any quality problems. The future valuations of the company will depend on its ability to successfully generate the revenues from other value-added services to compensate for the loss in its current revenues.

Equitymaster requests your view! Post a comment on "Mastek: E-commerce to drive growth ". Click here!

  

More Views on News

MASTEK 2020-21 Annual Report Analysis (Annual Result Update)

Nov 9, 2021 | Updated on Nov 9, 2021

Here's an analysis of the annual report of MASTEK for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of MASTEK. Also includes updates on the valuation of MASTEK.

If You had Invested Rs 1 Lakh in TCS in 2011, this is how Much You Would have Today (Views On News)

Nov 30, 2021

Did TCS perform better than the market and its peers?

India's Top 4 IT Companies are Struggling. Here's Why... (Views On News)

Oct 22, 2021

As attrition rates are unbelievably high, top Indian IT companies are going for big-ticket raises, and much more hiring this year.

Infosys had an Exceptional Quarter Buoyed by Huge Deal Wins. Revenue Guidance Boosts Stock (Views On News)

Oct 14, 2021

Infosys raised its forecast for annual revenue growth to 16.5-17.5% from the earlier 14-16%, predicted in July 2021.

Info Edge: The Anatomy of an Indian Internet Behemoth (Views On News)

Oct 2, 2021

Info Edge is very popular in the Indian startup ecosystem due to its active participation in funding events.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MASTEK SHARE PRICE


Dec 7, 2021 12:19 PM

TRACK MASTEK

MASTEK - HP COMPARISON

COMPARE MASTEK WITH

MARKET STATS