ICICI Direct is bullish on Majesco has recommended buy rating on the stock with a target price of Rs 670 in its research report dated November 06, 2018.
Majescoâ€™s rupee revenues increased 5.7% QoQ and 21.8% YoY in Q2FY19 mainly led by 10.8% QoQ growth in life & annuities (L&A). Cloud revenues (38.7% of total revenues) increased 14.0% QoQ led by 34.5% QoQ increase in cloud subscription revenues and 6.4% QoQ growth in cloud implementation revenues. Geographically, UK (4.8% of total revenues) registered an increase of 22.9% QoQ and North America (88.0% of total revenues) increased 5.4% QoQ0 EBITDA margins expanded ~272 bps QoQ to 10.9% mainly led by forex gains, higher cloud revenues and cost rationalisation.
After considering holding company discount of 35%, Majesco 70% stake in Majesco works out to be Rs 670/share. The revision in target price is mainly due to change in number of shares and revenues.
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