Mastek Q3 net profit rises 132 per cent

CORPORATE SCORECARD

Fuelled by the growth in the US market, Mastek has reported a consolidated net profit of Rs 40.23 crore for the third quarter ended March 31, 2007, compared with Rs 17.31 crore in the same period last year (up 132 per cent).

The company reported a total income of Rs 214.8 crore for Q3, an increase of 2.4 per cent. The net profit in the fourth quarter (April-June 2007) will exclude Deloitte Consulting (DC) joint venture.

The company had sold its 50.1 per cent stake, amounting to Rs 31.37 crore (based on consolidated financial statements), in Mastek Deloitte Consulting offshore development company for Rs 58.44 crore. The profit of Rs 27.07 crore arising out of this sale has been included in the consolidated level under profit on sale of subsidiary.

On a standalone basis, Mastek earned profit of Rs 51.38 crore from this stake sale. Net profit for this quarter was Rs 23.8 crore, increase of 8.9 per cent to the earnings reported in the preceding quarter in the current year and 37 per cent higher than the corresponding quarter last year. Sudhakar Ram, chairman and managing director, said: "We are pleased with the performance of our US operations, where our efforts are beginning to deliver noticeable results. We were also able to implement some key strategic initiatives, including the appointment of William McCarter as our US operations head and the sale of our stake in the Deloitte Consulting JV." The company added four new clients from the Asia-Pacific and European regions.

The company earned higher contribution from the US operations which posted 27 per cent growth over the sequentially preceding quarter and 28 per cent growth over the corresponding quarter last year.

Although European operations remained stable compared with the sequentially preceding quarter, it reported growth of 28 per cent over corresponding quarter last year.

Without considering the contribution of the DC venture in the quarter under review and in the sequentially preceding quarter, revenues increased 6 per cent from Rs 184.7 crore in Q2 FY07 to Rs 195.3 crore in Q3 financial year 2007.

On a corresponding quarter basis, revenues in Q3 registered an increase of 28 per cent to Rs 195.3 crore from Rs 152.2 crore in Q3 FY06. Net profit for the quarter under review was higher by 2.4 per cent at Rs 21.2 crore compared with Rs 20.7 crore in the sequentially preceding quarter.

For the April-June 2007 (fourth) quarter, Mastek expects its consolidated revenues to reflect the discontinuation of contribution from the DC venture and may reach between Rs 196 crore and Rs 200 crore.