ICICIdirect recommended Buy on Mastek with target of Rs 500 against current market price of Rs 317 in its report.

Commenting on the investment rationale, the stock broker said, "We are transferring Mastek to our Nano Nivesh universe to comply with our market capitalization mandate. Though we are maintaining our estimates pending regulatory approvals, we are changing our valuation methodology from P/E to sum-of-the-parts. We believe the insurance business could be valued at 1.5-1.8x trailing pro-forma sales metric while the services business could be valued at 4-5x trailing pro-forma EV/EBITDA. However, investors are cautioned that the fair value thesis is obligated to execution and earnings delivery."

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