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Mastek, an IT solutions player announced today its consolidated net profit dropped by 88% to Rs 0.85 crore in the first quarter June 30, 2014.
The company had posted a net profit of Rs 7.09 crore in the same period last year.
Net sales for the quarter declined marginally 0.62% to Rs 220.9 crore, compared with Rs 222.28 crore for the prior year period.
The drop in the operating revenue is directly related to the reassessment of project timelines of a North American client resulting in the restatement of revenues to the extent of Rs 10 crore, a company statement said.
"The June quarter has been quite challenging on the financial front. The right shifting of the project milestones on a project has led to an impact of Rs 10 crore on the revenue and profits for the quarter.
"However, once the project is executed successfully within the revised timelines, the company will be able to realise profits out of the contingency held back on the said project in subsequent period." Mastek Group CFO and Finance Director Farid Kazani said.
Commenting on the results, Sudhakar Ram, Group CEO & Managing Director, Mastek, said, "Although there has been an exceptional impact to the financials in the quarter, the business momentum remains intact with eight new accounts added in the quarter.
"The UK geography has shown good improvement and we expect to announce few more deals in the coming quarter. The continued investment in the North America insurance market is expected to see conversions in the second half of the fiscal year".
The company said it has added eight new clients during Q1 FY15. Total client count as of June 30 is 133 clients.
The 12-month order backlog was Rs 549.8 crore (USD 91.4 million) as on 30th June, 2014 and in constant currency stood at Rs 542.2 crore (USD 90.5 million) as compared to Rs 541.8 crore (USD 90.4 million) at the end of Q4 FY14, reflecting an increase of 1.5% quarter-on-quarter in rupee terms.
As on June, 2014, the company had a total of 3,223 employees, of which 2,368 employees were based offshore in India while the rest were at various onsite locations outside India. Employee count at the end of March 31, 2014 was 3,123.
