The management of Mastek which has miserably failed to grow in the past 5 years and is still a small cap company is now trying to play BUY BACK gimmick to boost its share price.
The company has approved buyback of equity shares at a price not exceeding Rs 750 per share through open market purchases route. It has set aside a maximum Rs 65 crore for buyback.
At the current price of Rs 390.50, the scrip trades at a PE multiple of 26.89, based on Q4 June 2007 annualised EPS of Rs 14.52. The stock is already expensive and we strongly recommend our readers not to take any fresh exposure. If you already hold Mastek, then Book Profits once the price stabilizes.