Mastek fell 1.48% to Rs 185.85 at 10:54 IST on BSE on profit booking after the company announced good Q3 December 2013 results after market hours on Thursday, 23 January 2014.
Meanwhile, the BSE Sensex was down 163.80 points, or 0.77%, to 21,209.86.
On BSE, so far 28,000 shares were traded in the counter, compared with an average volume of 1.02 lakh shares in the past one quarter.
The stock hit a high of Rs 190.60 and a low of Rs 185 so far during the day. The stock hit a 52-week high of Rs 213.85 on 9 January 2014. The stock hit a 52-week low of Rs 103 on 2 August 2013.
Shares of Mastek were in demand ahead of Q3 results. The stock jumped 10.29% in four trading sessions to Rs 188.65 on 23 January 2014, from a recent low of Rs 171.05 on 17 January 2014.
The stock had outperformed the market over the past one month till 23 January 2014, rising 23.66% compared with the Sensex's 1.29% rise. The scrip had outperformed the market in past one quarter, rising 19.44% as against Sensex's 2.92% rise.
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The small-cap company has an equity capital of Rs 12.32 crore. Face value per share is Rs 5.
Mastek after market hours on Thursday, 23 January 2014, announced that its net profit rose 21.9% to Rs 18.30 crore on 1.6% increase in total income to Rs 242.40 crore in Q3 December 2013 over Q2 September 2013.
The company reported EBITDA (earnings before interest, taxes, depreciation and amortization) of Rs 35.80 crore (14.8% of total income) in Q3 December 2013 compared with Rs 28.90 crore (12.1% of total income) in Q2 September 2013.
The company's operating revenue was Rs 240.20 crore in Q3 December 2013 compared with Rs 236.70 crore in Q2 September 2013, reflecting an increase of 1.5% in rupee terms and 0.7% in constant currency terms.
The product research & development spends during the quarter was Rs 15.60 crore compared with Rs 14.4 crore in Q2 September 2013.
Mastek said its 12-month order backlog was Rs 513 crore ($83 million) as on 31 December 2013 and in constant currency stood at Rs 515 crore ($82.50 million) as compared to Rs 558 crore ($89.10 million) at the end of Q2 September 2013, reflecting a drop of 8% quarter over quarter (QoQ) in rupee terms (drop of 7.5% QoQ in constant currency).
The company said it added 2 new clients during Q3 December 2013. Total client count as of 31 December 2013 was 123 (LTM).
Commenting on the results, Mr. Sudhakar Ram, Group CEO & Managing Director, Mastek, said: We had a steady quarter with a marginal increase in the top line despite the continued ramp down in our IT services accounts. The shift in focus to high end products and solutions has helped us improve our operating margins. While there may be a short term impact due to the NA account ramp-down, I am confident that we will be able to grow both our revenues and margins over the next few quarters.
Mr. Farid Kazani, Group CFO and Finance Director, Mastek, said: "The highlight of the quarter has been the resilience in margins despite increased employee and product expenses. And, the cash flows remain healthy allowing us to reward the shareholders with the proposed buyback.
Updating on the previous announcement dated 15 November 2013, Mastek said that due to the reprioritizing of the multi-vendor transformation program by a major North American customer, resulting in a slowdown in the program implementation, there will be impact on the revenues of Mastek.
The drop in revenues would be approximately $2.4 million per quarter (based on December quarter revenues) until the program regains momentum. However, the company continues to see good momentum in its insurance business in North America and is confident of bridging this gap in revenue over the next few quarters, the company said.
Mastek's total cash/cash equivalent stood at Rs 249.40 crore on 31 December 2013 as compared to Rs 250.70 crore at the end of 30 September 2013.
As on 31 December 2013, the company had a total of 3,128 employees, of which 2,370 employees were based offshore in India while the rest were at various onsite locations outside India. Employee count at the end of 30th September 2013 was 3,185.
Mastek is a leading IT player with global operations providing enterprise solutions to insurance, government, and financial services organizations worldwide. With its principal offshore delivery facility based at Mumbai, India, Mastek operates across North America, Europe, and Asia Pacific regions. Incorporated in 1982, Mastek has been at the forefront of technology and has made significant investments in creating intellectual property, which along with proven methodologies and processes, increase IT value generation to its customers through onsite and offshore deliveries.
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