Cloud offering to boost Majesco’s net

Majesco Limited reported 1.2 per cent growth in revenue on quarter-on-quarter basis in Q1FY20 in USD terms, with Cloud implementation (-18.9% QoQ) falling steeply owing to the MetLife deal going live; on the other hand, Cloud subscription revenue declined 2.8 per cent QoQ basis. Licence revenue surged 144 per cent QoQ owing to an extra $2 million recognised due to change in accounting policy. Adjusted EBITDA margin rose by 2.18 per cent QoQ to 13 per cent. Industry fundamentals and the key IBM partnership will enable Majesco to boost revenue growth going forward. Cloud offering is the company’s trump card as it has garnered 60-70 per cent of the deal pipeline in the past few months. Of the addressable market of $25 billion for Majesco, around $15-16 billion relates to the L&A market, while $9.25 billion relates to the US P&C market. The broking house currently has a buy for the stock.

Broking firm: Reliance Securities Rating: Buy Closing Price: `427.95