View & Valuation:
Mastek is blessed with lower exposure to Legacy (Digital is 80% of rev) but generates low-teen margins (13%) due to higher onsite rev mix (72%). For near to medium term, strong seasonality offset by the Brexit deadlock could result in modest revenue growth. Divestment of stake in Majesco US could throw up cash which can be used for acquisitions. UK Government revenues could grow at 25% CAGR over FY19-21E, as Government navigates through their digital transformation journey where Mastek is among top-10 vendors. US revenues witnessed decline for the third consecutive quarter in USD terms, we believe it has bottomed out at a smaller base and large market.