BSE:539289

Stock Analysis Report

Executive Summary

Majesco Limited, together with its subsidiaries, provides software solutions for the insurance industry in North America, Europe, and internationally.

Rewards

Trading at 41.1% below its fair value

Earnings are forecast to grow 22.65% per year

Earnings grew by 1.7% over the past year

Risk Analysis

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Does not have a meaningful market cap (₹7B)



Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Majesco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 539289's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.3%

539289

6.6%

IN Software

-3.6%

IN Market


1 Year Return

-53.3%

539289

-49.4%

IN Software

-32.1%

IN Market

Return vs Industry: 539289 underperformed the Indian Software industry which returned -49.4% over the past year.

Return vs Market: 539289 underperformed the Indian Market which returned -32.1% over the past year.


Shareholder returns

539289IndustryMarket
7 Day-2.3%6.6%-3.6%
30 Day-40.5%-30.2%-25.1%
90 Day-40.1%-33.6%-30.2%
1 Year-52.7%-53.3%-48.5%-49.4%-30.7%-32.1%
3 Year-40.6%-41.6%-45.9%-50.5%-19.8%-24.1%
5 Yearn/a-37.7%-46.5%-10.4%-15.2%

Price Volatility Vs. Market

How volatile is Majesco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Majesco undervalued compared to its fair value and its price relative to the market?

41.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 539289 (₹230) is trading below our estimate of fair value (₹390.26)

Significantly Below Fair Value: 539289 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 539289 is poor value based on its PE Ratio (12x) compared to the Software industry average (7.3x).

PE vs Market: 539289 is poor value based on its PE Ratio (12x) compared to the Indian market (9.4x).


Price to Earnings Growth Ratio

PEG Ratio: 539289 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: 539289 is overvalued based on its PB Ratio (0.9x) compared to the IN Software industry average (0.7x).


Next Steps

Future Growth

How is Majesco forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

22.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 539289's forecast earnings growth (22.6% per year) is above the savings rate (6.5%).

Earnings vs Market: 539289's earnings (22.6% per year) are forecast to grow faster than the Indian market (19.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 539289's revenue (13.2% per year) is forecast to grow faster than the Indian market (8.8% per year).

High Growth Revenue: 539289's revenue (13.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 539289's Return on Equity is forecast to be low in 3 years time (10.7%).


Next Steps

Past Performance

How has Majesco performed over the past 5 years?

60.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 539289 has a large one-off gain of ₹313.9M impacting its December 31 2019 financial results.

Growing Profit Margin: 539289's current net profit margins (5.3%) are lower than last year (5.7%).


Past Earnings Growth Analysis

Earnings Trend: 539289 has become profitable over the past 5 years, growing earnings by 60.5% per year.

Accelerating Growth: 539289's earnings growth over the past year (1.7%) is below its 5-year average (60.5% per year).

Earnings vs Industry: 539289 earnings growth over the past year (1.7%) exceeded the Software industry -4%.


Return on Equity

High ROE: 539289's Return on Equity (8.2%) is considered low.


Next Steps

Financial Health

How is Majesco's financial position?


Financial Position Analysis

Short Term Liabilities: 539289's short term assets (₹7.1B) exceed its short term liabilities (₹2.1B).

Long Term Liabilities: 539289's short term assets (₹7.1B) exceed its long term liabilities (₹887.6M).


Debt to Equity History and Analysis

Debt Level: 539289's debt to equity ratio (0.08%) is considered satisfactory.

Reducing Debt: 539289's debt to equity ratio has reduced from 9.3% to 0.08% over the past 5 years.

Debt Coverage: 539289's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 539289 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 539289 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 539289's debt is covered by short term assets (assets are 1076.4x debt).


Next Steps

Dividend

What is Majesco's current dividend yield, its reliability and sustainability?

0.87%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 539289's dividend (0.87%) isn’t notable compared to the bottom 25% of dividend payers in the Indian market (0.96%).

High Dividend: 539289's dividend (0.87%) is low compared to the top 25% of dividend payers in the Indian market (4.06%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 539289's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 539289's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (7.9%), 539289's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 539289 is not forecast to pay a dividend in 3 years.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Adam Elster (51yo)

1.5s

Tenure

Mr. Adam Elster serves as Chief Executive Officer and Director of Majesco since October 1, 2018. He has been Chief Executive Officer and Director at Majesco Limited since October 1, 2018. He was Executive  ...


Leadership Team

NamePositionTenureCompensationOwnership
Farid Kazani
MD & Group CFO - India0.25yr₹29.51m0.58% 38.5m
Varika Rastogi
Company Secretary1.92yrs₹2.41m0.000020% 1.3k
Adam Elster
CEO & Director1.5yrsno datano data
Manish Shah
President & Chief Product Officer1.08yrs₹23.20mno data
Wayne Locke
Chief Financial Officerno datano datano data
Edward Ossie
Chief Operating Officer5.25yrs₹23.12mno data
Lauren Holmes
Chief Information Officer0.75yrno datano data
Diwakar Pingle
Head of Investor Relationsno datano datano data
Lori Stanley
Chief General Counsel0.58yr₹13.99mno data
Ashwin Rodrigues
Director of Global Marketingno datano datano data

1.1yrs

Average Tenure

52.5yo

Average Age

Experienced Management: 539289's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Adam Elster
CEO & Director1.5yrsno datano data
Robert Restrepo
Directorno datano datano data
Earl Gallegos
Vice Chairman of the Board of Directorsno datano datano data
Sudhakar Ram
Directorno datano data5.69% 375.3m
Ketan Mehta
Co-Founder & Chairman of the Board1.5yrsno data9.51% 627.9m
Rajesh Hukku
Directorno datano datano data
Arun Maheshwari
Director5.25yrsno datano data
Carolyn Johnson
Director1.25yrsno datano data
Vasant Gujarathi
Independent Director0.083yrno datano data

1.5yrs

Average Tenure

61yo

Average Age

Experienced Board: 539289's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 539289 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.7%.


Top Shareholders

Company Information

Majesco Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Majesco Limited
  • Ticker: 539289
  • Exchange: BSE
  • Founded: 2013
  • Industry: Application Software
  • Sector: Software
  • Market Cap: ₹6.601b
  • Shares outstanding: 28.70m
  • Website: https://www.majesco.com

Number of Employees


Location

  • Majesco Limited
  • MNDC
  • MBP-P–136, 136A
  • Navi Mumbai
  • Maharashtra
  • 400710
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
539289BSE (Mumbai Stock Exchange)YesEquity SharesININRAug 2015
MAJESCONSEI (National Stock Exchange of India)YesEquity SharesININRAug 2015

Biography

Majesco Limited, together with its subsidiaries, provides software solutions for the insurance industry in North America, Europe, and internationally. The company offers software, consulting, and services for insurance value chain. It also provides policy management, underwriting, rating, billing, claims management, distribution management, BI/analytics, predictive modeling, digital platform with mobile and portal, testing services, cloud services, bureau and content services, and others. The company offers software solutions for property and, casualty and life and annuity providers. The company was formerly known as Minefields Computers Limited and changed its name to Majesco Limited in June 2015. Majesco Limited was incorporated in 2013 and is based in Navi Mumbai, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/06 13:39
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.