External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

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Equity Bottom-Up

<ul><li>Mastek reported an in-line revenue performance (+2.1% QoQ, flat organic) while the margin was below estimate</li><li>The muted organic growth was due to continued pressure in NHS and weak UK financial services offset by growth in the UK government and Middle East business (Manufacturing)</li><li>The UK government pipeline remains strong but decision-making is slow and NHS revival is taking longer than expected (recovery timelines have shifted to FY25E)</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mastek reported an in-line revenue performance (+2.1% QoQ, flat organic) while the margin was below estimateThe muted organic growth was due to continued pressure in NHS and weak UK financial services offset by growth in the UK government and Middle East business (Manufacturing)The UK government pipeline remains strong but decision-making is slow and NHS revival is taking longer than expected (recovery timelines have shifted to FY25E)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Thematic (Sector/Industry)

<ul><li>We hosted the ISG index call (link) and the key message was recovery in the business environment ahead</li><li>While ISG maintained the CY23 outlook on growth in managed services deal bookings (+5% for CY23), recovery ahead is based on (1) improving pipeline for new scope projects (vs renewals &amp; extension heavy recently that drove vendor consolidation) (2) approval threshold for projects and transition timelines normalising with stable pricing environment (3) pipeline build-up for SIs with increased enterprise interest in captives and (4) stability to return in BFSI, which was impacted by executive movement earlier in enterprises</li><li>The current disconnect between the growth in bookings and soft revenue growth is largely due to the impact on discretionary services</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We hosted the ISG index call (link) and the key message was recovery in the business environment aheadWhile ISG maintained the CY23 outlook on growth in managed services deal bookings (+5% for CY23), recovery ahead is based on (1) improving pipeline for new scope projects (vs renewals &amp; extension heavy recently that drove vendor consolidation) (2) approval threshold for projects and transition timelines normalising with stable pricing environment (3) pipeline build-up for SIs with increased enterprise interest in captives and (4) stability to return in BFSI, which was impacted by executive movement earlier in enterprisesThe current disconnect between the growth in bookings and soft revenue growth is largely due to the impact on discretionary servicesContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>IT sector growth has slipped on account of first-order and second-order implications of the prevalent macros</li><li>The macro challenges are manifesting into a set of outcomes for the sector ranging from cuts in discretionary spending, delay in decision making (slower conversion from pipeline to TCV), slower deal ramp-up, to change in the propensity for price increases/volume discounts</li><li>While the resilience/opportunity in the sector is the medium-term recoil (high-single digit CC growth in FY25E following mid-single digit in FY24E), in this note we focus on the ‘near-term demand’ markers and assess the growth dispersion despite the aggregate slowdown</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

IT sector growth has slipped on account of first-order and second-order implications of the prevalent macrosThe macro challenges are manifesting into a set of outcomes for the sector ranging from cuts in discretionary spending, delay in decision making (slower conversion from pipeline to TCV), slower deal ramp-up, to change in the propensity for price increases/volume discountsWhile the resilience/opportunity in the sector is the medium-term recoil (high-single digit CC growth in FY25E following mid-single digit in FY24E), in this note we focus on the ‘near-term demand’ markers and assess the growth dispersion despite the aggregate slowdownContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>ICICI Securities: ISEC printed a 5% QoQ de-growth in retail broking revenue on a weak base (Q3FY23: -20% YoY), on the back of muted cash volumes and a sharp dip in equity yields</li><li>We are encouraged by the management’s focus on improving its derivatives market share and diversifying revenue streams</li><li>We draw comfort from ISEC’s renewed focus on building digital prowess, albeit, given its high dependence on cash ADTVs (56% of retail broking mix), we reiterate our core thesis on the cyclicality in its revenues</li><li>We trim our EPS estimates by 2/3% for FY24E/25E to factor in weak momentum in cash ADTVs and higher staff costs, maintain ADD with a lower target price of INR600 (14x Mar-25E EPS, rolling forward multiple adjustment from 15x to 14x).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ICICI Securities: ISEC printed a 5% QoQ de-growth in retail broking revenue on a weak base (Q3FY23: -20% YoY), on the back of muted cash volumes and a sharp dip in equity yieldsWe are encouraged by the management’s focus on improving its derivatives market share and diversifying revenue streamsWe draw comfort from ISEC’s renewed focus on building digital prowess, albeit, given its high dependence on cash ADTVs (56% of retail broking mix), we reiterate our core thesis on the cyclicality in its revenuesWe trim our EPS estimates by 2/3% for FY24E/25E to factor in weak momentum in cash ADTVs and higher staff costs, maintain ADD with a lower target price of INR600 (14x Mar-25E EPS, rolling forward multiple adjustment from 15x to 14x).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily - ICICI Securities, Mastek

India

Mastek Limited provides software solutions and integration services for the financial services, insurance, manufacturing, telecom and retail sectors.

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Mastek reported an in-line revenue performance (+2.1% QoQ, flat organic) while the margin was below estimate. The muted organic growth was due to...

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HSIE Results Daily - ICICI Securities, Mastek

ICICI Securities: ISEC printed a 5% QoQ de-growth in retail broking revenue on a weak base (Q3FY23: -20% YoY), on the back of muted cash volumes...

HDFC Securities

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