MASTEK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.9

📊 Core Financials Overview

Profitability

PAT declined slightly from ₹46.3 Cr to ₹41.9 Cr — a 9.5% dip, though YoY growth remains strong at 48.8%.

EPS: ₹38.4 — decent, but not exceptional given the high valuation.

Return Metrics

ROCE: 15.5% — healthy capital efficiency.

ROE: 13.5% — solid shareholder return.

Debt Profile

Debt-to-equity: 0.01 — virtually debt-free, a major strength.

Cash Flow: Not explicitly stated, but low debt and consistent profitability suggest stable operating cash flows.

💹 Valuation Indicators

Metric Value Commentary

P/E Ratio 61.1 Significantly above industry average (30.0) — priced for high growth.

P/B Ratio ~8.35 Elevated — reflects premium expectations.

PEG Ratio 2.65 High — suggests valuation may be stretched relative to growth.

Intrinsic Value Likely below current price Due to high multiples and recent profit contraction.

🧠 Business Model & Competitive Advantage

Mastek Ltd. is a mid-cap IT services company specializing in

Digital Engineering & Cloud Transformation: Transitioned from legacy software to cutting-edge digital services

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Strategic Acquisitions

Evosys, MST Solutions, and BizAnalytica — expanded capabilities in Oracle Cloud, Salesforce, and Data/AI services

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Geographic Reach

Strong presence in the UK and Europe (56.9% of revenue), with growing traction in the US healthcare, retail, and government sectors

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Innovation Focus

Investments in generative AI, data services, and cloud-native platforms — positioning for future enterprise demand.

Its competitive edge lies in agile execution, acquisition-led growth, and deep domain expertise in public sector and healthcare verticals.

📈 Technical & Sentiment Signals

RSI: 47.5 — neutral zone, no strong momentum.

MACD: Negative — bearish crossover, short-term caution.

Volume: Below average — suggests low speculative interest.

DMA 50/200: Price hovering near both — trend indecisive.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹2,300–₹2,450 — near support and below moving averages.

Long-Term View: Mastek is a niche digital transformation play with strong fundamentals and minimal debt. However, current valuation is rich. Best suited for long-term investors who believe in its strategic expansion and digital pivot. Dividend yield of 0.93% adds modest income support.

Let me know if you'd like a peer comparison with Persistent Systems or Coforge to sharpen your view.

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