Mastek Limited shares rose after an announcement to acquire a US-based cloud data and AI firm, BizAnalytica LLC. The shares rose 0.5% to Rs 2,171 at 9.17 am on the NSE.

In an exchange filing, Mastek held that its wholly-owned step-down subsidiary, Mastek Inc, would acquire a 100% stake in BizAnalytica. This acquisition will enable Mastek to capitalise on the budding market potential in AI, cloud data, and reconstruction.

Mastek will make an honest payment of $16.72 million to buy BizAnalytica. An earn-out payment between $0 and $24 million will also be made, depending on meeting targets. If these targets are achieved in 3 years, the total earn-out payment will be about $15.3 million. An earn-out payment is another reimbursement to the business owner after the sale.

In the April-June quarter, Mastek Limited reported a 27% increase in revenue from operations to Rs 725 crore YoY. However, the net profit slides 12.8% YoY to Rs 73 crore in Q1FY24.

During Q1FY23, the company increased 22 new clients, resulting in a total active client number of 436, which embodied a 6% decline on a QoQ basis. Meanwhile, the order backlog for Q1FY24 was Rs 1763 crore, marking a 16% increase YoY but a 1.7% decline on a QoQ basis. Order backlog refers to the orders the business has won but is yet to be realised.

Mastek Limited is a numerical engineering and cloud transformation company presenting solutions to clients in healthcare, life sciences, retail, manufacturing, financial services, and government segments.