Mastek shares are on fire today, surging 20% from the previous close and locked in the upper circuit at Rs 358.8, on the back of a quantum jump in first quarter financial earnings. The small-cap information technology services provider said earlier today that its fiscal first quarter net profit ballooned six times to Rs 14.66 crore on-year. Revenue for the April-June quarter rose to Rs 188 crore, up 41% from that in the same quarter a year ago.
However, investors might not be happy yet even with the 20% jump in the stock today, as it has seen better days, very recently. Mastek stocks had surged about 82% within a span of one month in April-May, again on the back of strong fourth quarter financial results. Mastek’s shares touched this year’s high of Rs 356 on May 11, rising 82% from Rs 196 on April 11.
However, soon after, bears prevailed and knocked the shares down 26% in just two weeks. Mastek stock fell to a low of Rs 251.6 on June 27, and has been languishing around those levels ever since. With today’s 20% jump to Rs 358.8, Mastek shares have barely breached the levels already seen earlier this year.
Mastek acquired US-based digital solutions firm TaisTech in January for Rs 170 crore, boosting its topline and adding to its thrust on digital transformation. Mastek’s revenues and profits are on a rise ever since. Further, Mastek’s constant recovery on the growth path and its consistent execution of its core business are the other primary drivers for the company’s stellar earnings rise, and share price performance. Going forward, the successful integration of TaisTech would be a key factor for Mastek shares to rise further, though, the company’s strong cash position provides it a downside support.
The acquisition of TaisTech will accelerate growth for Mastek in the US market and will augment its 2020 vision strategy to be a global leader in digital transformation services, the company had said at the time of the buyout in January. In an interview, Sudhakar Ram, Vice Chairman and Managing Director, Mastek had said in January that the next year was looking good for Mastek and the company would will emerge as a digital leader in the next two-three years.