3 MAJESCO share price target reports by brokerages below. See what is analyst's view on MAJESCO share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
we expect growth in cloud revenues to be under pressure due to completion of IBM-MetLife deal and time gap in scaling up subscription revenues. Further, we lower our margin estimates for FY20E and expect a gradual improvement over FY19-21E. Hence, we maintain HOLD rating on the stock. We value Majesco US (Majesco India holds 70.3% stake) at 3x market cap/sales, which is at ~70% discount to global peers such as Guidewire to account for modest growth/margin profile. After considering aholding company discount of 35%, Majesco India’s 70.3% stake in MajescoUS works out to Rs 470/share.
We maintain BUY on Majesco following slight miss on revenue & margins in 1QFY20. Revenue grew despite a steep fall in the cloud revenue and margin expansion (lower than est.) was healthy. The order backlog is robust and cloud deal wins are stable. We await a large deal win from the IBM/Capgemini channel. Our TP of Rs 685 implies EV/rev multiple of 2.0x on June-FY21 rev.
From strategic perspective, we believe Majesco is on the right track in terms of focusing substantially on building out a Cloud-based business and defocusing on the on-premise model. Digital transformation in the insurance industry – both P&C and L&A – continues to play out and Majesco appears well-positioned to benefit from the same. Recent appointment of new CEO along with several market and client-facing roles, should ensure continued focus on the front-end. Tweaking our revenue estimates by 1-3% for forward years, we maintain our BUY recommendation on the stock with a revised Target Price of Rs640 (from Rs683 earlier).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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