Majesco Vision 2020 Research Report By IndiaNivesh

Majesco Ltd (MJCO) presence in modern cloud‐based “fast‐twitch” property & casualty (P&C) and life & annuity (L&A) insurance industry platform remains key growth driver. In US large number of insurers use 30+ year old platform, which become hurdle for growth in changing industry environment. As a result players like MJCO will benefit from the insurance software upgrade cycle in the US. Out of ~2700 P&C insurance players only 675 carriers have bought the third party software. Given the top ranking in billing software and number three position in policy along with proven cloud‐based software offering and end‐to‐end solution, MJCO is positioned to deliver 29.2% revenue CAGR over FY16E‐20E. MJCO product have huge penetration, cross‐selling and upscale opportunity. We maintain BUY on MJCO with target price of Rs.1,630 (Valuing 3.1x EV/Sales FY20E).

At CMP of Rs.558, MJCO is trading at EV/Sales of 1.5x/1.1x/0.9x its FY16E/FY17E/FY18E estimate. We maintain BUY with target price to Rs.899/Rs.1,630 (Valuing 2.3x/3.1x EV/Sales FY18E/FY20E) on MJCO. Given the set vision and mission, we forecast MJCO’s stock to deliver return CAGR in the range of 24.9% to 36.1% over next five years (FY16E‐20E).