INSUBCONTINENT EXCLUSIVE:
Emkay Global Financial Services has a buy call on Majesco with a target price of Rs 700.
The current market price of Majesco is Rs
509.40.
Time period given by the brokerage is one year when Majesco price can reach the defined target.
Views of Emkay Global Financial
Services on the company:Cloud based deals continue to be key growth catalyst: Majesco Q1FY19 results beat was driven by a robust performance
Total Cloud business revenue grew by 74 per cent yoy, accounting for nearly 36 per cent of the total revenue
The Cloud business is witnessing huge demand, given its flexible pricing model, low upfront investments, better speed-to-value proposition
and growing number of partner eco-systems for its offerings
As of Q1FY19, it has 38 clients on Cloud v/s 32 in Q1FY18
Faster implementation is also acting as a key differentiation, as it has been taking its clients live in record time
One of its Tier I clients in PC space went live in 90 days for its Greenfield launch
Other customers that concluded implementation in Q1FY19 were also within the prescribed time-lines of 6-19 weeks
Management commentary remains confident on outlook and visibility given the robust interest in the market, huge build-up in pipeline and
Despite the decline in order bookings, the company is confident of witnessing growth in order wins in FY19
Majesco remains on track in terms of prospects in the IBM channel
The delay in new win in the IBM channel can largely be attributed to typical longer decisionmaking cycle in the Tier-1 space
Order book to be executed over next twelve month stood at US$83.4mn.
Cloud to propel annuity revenue stream and profitability; Maintain BUY:
As of Q1FY19, the total recurring revenue stood at Rs0.7bn, up 49 per cent yoy
We believe that the robust traction in the Cloud business would drive overall recurring revenue and eventual profitability of the business
We expect revenue CAGR of nearly 16 per cent and OPM gains of nearly 750bps over FY18-20E and maintain BUY rating with DCF-based TP of
