Outlook & Valuation
Strong quarterly revenue growth, further ramp-up of deal, healthy order book metrics and improving EBITDA margin drive our confidence on Majesco, going forward. We continue to believe that the industry fundamentals – including greater third-party software adoption by insurers – remain on track. Looking ahead, we believe Majesco’s IBM partnership will be the key growth driver. The recent Rs2.3bn QIP is likely to boost inorganic growth initiatives for Majesco. Rolling over our estimates to FY20E and valuing the stock at 1.75x EV/revenue, we maintain our BUY recommendation on the stock with a revised Target Price of Rs730 (from Rs667 earlier).
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