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You are here : IndiaNotes >> Research & Analysis >> Companies >> Majesco Ltd. >> Research

Majesco Ltd: Buy for an upside of 14.40% in 3 months

SMC | 30 Nov, 2016  | Follow Author | Add to my Favourites 
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According to the management of the company, it foresee steady progress towards the execution of its growth oriented strategy outlined around market penetration, investment in solutions and platform for client successes and strategic focus on its cloud business. Majesco sees good growth momentum in terms of new client wins, order backlog and revenue. The company is confident that its broad solution portfolio will continue to drive the growth. It would continue to focus on enhancing its capabilities and investing in its growth platform, sales and marketing going forward.


Business Profile


Majesco enables insurance business transformation for about 150 insurance customers worldwide by providing solutions which include software, consulting and services.


Investment Rationale


Majesco North America contributes around 87.4% of total revenues. The company experienced strong momentum in terms of new client additions, revenue growth, successful client implementations, and growth in cloud business. It has added 16 new customer logos which is very significant in powering its market momentum and help to increase 12-month executable backlog.


On a consolidated basis, It has reported net profit of Rs 5.21 crore in Q2 Sep 2016 compared with net loss of Rs 0.58 crore in Q2 Sep 2016. Net sales rose 12% to Rs 207.04 crore in Q2 Sep 2016 over Q2 Sep 2015.


During the quarter, the company extended its working relationship with IBM Cloud platform that has been evolving over a number of years to provide its complete portfolio of P&C insurance software products to customers in a public cloud. Majesco offers its products on IBM.


It has also completed the successful integration of Cover-All and Agile Technologies into Majesco business. The success was demonstrated by Majesco’s client and talent retention, as well as the joint new logo wins for its newly combined offerings. As the industry consolidates, the company would continue to look for further accretive acquisition opportunities.


We recommend a buy in the stock of MAJESCO LTD for a short-term perspective. The stock is trading at its good support level with good fundamental records and is expected to move up from this level. It made a 52 week low Rs. 348.00 and 52 week high of Rs 789. Buy around at 398 with a closing below stop loss of Rs.370 levels for the target of Rs.455.

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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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