Majesco Limited - looking Forward


(Parag) #106

Majesco has already take enough provision for this. They have taken away all customer receivables and have delivered version of the software to meet customer demands.

They are hoping that the new version will fulfill the performance requirement of the client. If the client is satisfied, then there won’t be any further proceeding (hopefully). In addition, they have insurance in place for this lawsuit (not sure how much it cover).

Dis- Invested, so view could be biased.


(Divyanshu Taneja) #107

Sir could you please share the link of same news
Thanks @niravacharya and @paragbharambe


(Sanjay Prajapat) #108

The same was clarified by the management in the recent concall. The claim, as they mentioned, was “adequately” covered.


(Divyanshu Taneja) #109

(Divyanshu Taneja) #110

(Divyanshu Taneja) #112

http://equitybulls.com/admin/news2006/news_det.asp?id=231421


(Parag) #113

Looks like another deal with IBM cloud on the way. This is from recent company event. Here it the full PDF.


(Vilas D'Souza) #114

https://seekingalpha.com/amp/article/4209801-majesco-see-serious-multiple-expansion?source=tweet&__twitter_impression=true


(Vilas D'Souza) #115

How come MJCO is at 8.25$ while MAJESCO is 460?


(ASPN) #116

Share price is a function of number of outstanding shares, face value, valuation multiple etc. Further, Majesco India - being a holding company for MJCO - is likely to trade lower with perceived holding company discount.

Why do you think it will be simply INR equivalent of its USD share price?


(Vilas D'Souza) #117

Few months back it was the other way round.


(ASPN) #118

No it cannot be the other way round either. Pls understand that there cannot be a direct comparison between share price of “MAJESCO INC US” and “MAJESCO LTD INDIA”.

Tomorrow, if MAJESCO INC US decides to issue bonus shares of 1:1 or split its shares, the share value will fall from $8.25 to $4.12 (in proportion to bonus shares issued). Will you compare the prices then? Hope the issue is clear now.

P.S.
MAJESCO INC US has approx 36.6 mn shares outstanding with Market Cap of approx USD 300 million (roughly INR 2200 Crores).
Whereas, MAJESCO LTD INDIA has approx 28.12 shares outstanding with Mkt Cap of roughly INR 1300 Crores.
So the holding company of MJCO US is valued in India at 1300 Cr only. This is what I meant by holding company discount.


(Vilas D'Souza) #119

Thanks for sharing, will explore further in this direction. Meanwhile, check the prices on June 14 versus that of Friday.


(Divyanshu Taneja) #120

I am a new investor so pardon my mistakes but i want to get some insight and views by other forum members to comment on below points and what in they foresee for majesco
majesco management guided revenue of 225 million dollars by end of 31 march 2019 BUT they are way behind it ,( 2)secondly they raised money to acquire new company -no progress there(.3) new clients addition speed has slowed down
Any views @paragbharambe


(Parag) #121

Majesco has given up on achieving a revenue target of $225 million. They are not publicly stating any revenue target for Majesco.

Wrt acquisitions, they have not yet spent the money, and I am sure they are evaluating options, but nothing has materialised yet. Majesco has not said much about an acquisition. Based on my understanding of management comments over the last few quarters, I think they would go for acquisition that will add to their profitability rather than drain it in short to medium term.
Also, Majesco’s US-listed company is howering $8 dollar, so I won’t be surprised if they go acquisition with US company’s stock. However, this is my opinion and could be wrong.


(Divyanshu Taneja) #122

Has anyone reviewed the concall details of usa majesco, any major points


(Parag) #123

Few points from Majesco US Con Call

  • Great quarter- Net earning is 2.8 million dollar, which is all most three time last Q-FY19 earning.
  • Signed two new Tier 1 customer- Does not seem to be on clouds, though, but it is the startup division of the tier- 1 company.
  • Gartner has put Majesco is a leader quadrant for the insurance industry. Gartner credential along with IBM partnership will give a little boost to Majesco in the market.
  • Few of deals have been postponed into the current quarter. This bode well for the current quarter. Also last year they signed ten customers for Q3. Last year due to Hurrican season, the deals were bunched in December quarter, hence a higher number. In Q3-Fy19 customer signed may not 10, but looks like around 5 or more.

Few More thoughts

  • Majesco new CEO is coming from CA-sales. Due to his strong sales background, the companies sales are likely to get streamlined with a sharp sales focus. This shall be reflected in FY21 as it may at least take 3/4 quarters for him to settle in and get his strategy in action. This will also fix companies problem as sales were not one of the strong things. I think Majesco has taken a cue from Mastek which did the same things. Due to new CEO, Majesco will make an acquisition in the category in which the new CEO wants. This could slow down the in-organic initiative.
  • (My Guess)India company PAT shall be around 20 cr for the Q2-Fy19 quarters.
  • Majesco has added 8/10 cloud customer in last 3/4 quarters. This bode well for the FY20 as they will inch the subscription revenue higher in FY20.
  • IBM Metlife deal shall go live in the next 4/5 months. It will be a big subscription revenue booster in next 4/5 quarters.
  • New IBM (potential) deal with a tier 1 supplier which is in the POC stage. It may be decided may in Q4 or Q1-FY20. But things are certainly looking good for the IBM venture. I think they may sign a deal or two with another tier player, which has the potential to put Majesco top of the chart in the term of cloud subscription. Although, Majesco is an early adopter of the cloud for insurance, Guidewire and Duch Creek are ahead of them as they acquired few companies later to boost their cloud business. As more and more customer sign on Majesco cloud, they will take incremental share away from other player and gain market share.

Gartner link


(Divyanshu Taneja) #124

Unidentified Analyst

So my first question is for Adam. I think as recovering the stock for couple of years, I think if we take a look at the last few quarters, we’ve started to finally see the ramp that management was expecting in revenues. And with that said and the change happening now, what are your top priorities or goals that you think are necessary to target to the Company during next level?

Adam Elster

With this outlook of the business, I’m very encouraged by the pipeline and the activity with the customers. As you look to moving the business from a legacy business models and on-perm as technology to a cloud base, there’s obviously a different ramp and how that business operate, right, where you’re moving from large upfront deals to cloud base deals that are smaller in nature, smaller in term and then have a ramp over time.

This is a cutting from usa con call please some one explain me the in depth knowledge for “As you look to moveing…ramp over time” why the deals are small in nature and also of smaller duration. Please some one explain


(Parag) #125

On-premise deals consist of an upfront license fee. For example, $1 million licenses fee plus implementation fee and then the company receives regular maintenance fees.
Clouds deals are structured very differently to the on-premise deals. The company does not receive an upfront license fee. The company initially gets only implementation fees. Initial years the cloud revenue is generally less as the company starts building up and migrating on clouds. However, as more and more business moves into clouds, the subscription parts get bigger and bigger. In a way, the clouds subscription revenue replaces the licenses revenue in on-premise deals. Hence Adam is referring that clouds revenue builds up slowly (no upfront licenses).

Guidewire indicated that over the three years, the clouds subscription brings 3 to 4 times the on-premise deals over the lifetime of the contracts as cloud provider not only provides software but takes care of infrastructure and testing part for the product. However, when I asked the same question to Majesco in last few con call, Majesco indicated this number to be around twice the on-premise deals. Essentially, this means that the cloud revenue brings in double the revenue than the on-premise revenue.


(Divyanshu Taneja) #126

Thanks a lot @paragbharambe Ji