Priyanka Tiwari
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According to Sharekhan, Mastek anticipates a 40-50% revenue growth in the UK healthcare segment next year. This expansion is backed by increased investment in AI, data technologies, and the UK government's modernization initiatives. However, short-term delays are expected due to decision-making slowdowns following the merger of NHS England with the Department of Health and Social Care (DHSC).
Strategic Shift in North American Operations
Mastek is reorganizing its North American business, aiming to enhance profitability through AI-driven efficiencies and refined go-to-market strategies. The company is targeting tier-2 clients ($1-10 billion revenue range) and Fortune 500 companies, particularly in the Healthcare and Manufacturing sectors.
Margin Outlook and Profitability Timeline
While short-term margins may be under pressure due to UK contract ramp-ups and reorganization costs in North America, Sharekhan expects profitability to improve over 12–36 months. This will be driven by AI efficiencies and strategic realignment in core markets.
Valuation and Recommendation
Sharekhan reiterates a ‘Buy’ rating on Mastek with an unchanged price target of ₹3,030. At the current market price (CMP), the stock is trading at:
- 19.9x FY25E EPS
- 18x FY26E EPS
- 15.3x FY27E EPS
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