Mastek FY2007 PAT up 50% at Rs 85.8 cr

Revenues at Rs 743 cr, up 28% in dollar terms

April-June 2007 quarter* revenues up 12% at Rs. 187 cr

Net profit up 28% at Rs 23.6 cr, US operations register 35% growth

Board recommends final dividend of 90%

Strong FY2008 outlook, driven by:

· Addition of 12 accounts during FY07

· Robust pipeline in both Government and Insurance verticals

· Value accretion from recently acquired Vector Insurance Services in USA

· Strengthened leadership team

Mumbai, India "� July 19, 2007: Mastek, a high-end IT solutions player with global operations providing new technology and IP-led enterprise solutions to insurance, government, and financial services organizations worldwide, announced its audited financial results for the quarter and financial year ended June 30, 2007 today.

Review of quarterly financial performance**

Total income for the quarter under review was Rs 187.1 crore, with strong contributions from both the European and US operations. EBITDA for the quarter under review was Rs 32.9 crore, and Net Profit stood at Rs 23.6 crore. This performance was achieved despite a noticeable strengthening of the Indian Rupee against several major currencies including the US dollar and British pound during the quarter under review. The quarter under review was the first full quarter of operations after the Deloitte joint venture was discontinued on 09 March 2007. The company's financial performance for the quarter under review is therefore not strictly comparable to either the corresponding period last year or the sequentially preceding period, as the previous quarters included the erstwhile Deloiite JV's contributions.

4 new accounts added during the April-June 2007 quarter

Elixir, Mastek's enterprise platform for the Insurance industry, continued to gain traction during the quarter with 4 new accounts added during the period. The commencement of billing to these new accounts is expected in the current quarter and get reflected in performance going forward.

Review of annual performance**

For the full year ended 30 June 2007, the company's performance reflects contributions from the erstwhile DC JV only till 09 March 2007. Despite no contribution from the DC JV during Q4FY2007, the company delivered revenues of Rs 812.7 crore for the fiscal compared to Rs 701.1 crore last year. The company reported a Net Profit of Rs 90.4 crore for the year, translating into an EPS of Rs 31.8.

Review of financial performance without the DC JV

Quarterly performance: After excluding contributions from the erstwhile Deloitte JV, the company has reported an increase of 12% in total income over the corresponding quarter last year. Total income for the quarter under review was Rs. 187.1 crore compared to Rs 167.5 crore last year (excluding DC JV contribution). The revenue performance during the quarter was in line with expectations, in view of the adverse forex condition and execution delay in one project due to a shift in client priorities (as mentioned during the preceding quarter). EBITDA for the quarter was Rs 32.98 crore, implying an EBITDA margin of 16.4%. PAT for the quarter under review was Rs. 23.6 crore, 28% higher compared to the earnings in the corresponding quarter last year and 13% higher than the preceding quarter in the current year.

Annual performance: Without considering the contribution of the erstwhile Deloitte Consulting joint venture in the preceding financial year, revenues during the financial year ended June 30, 2007 were 26% higher at Rs 743.2 crore from Rs 591.8 crore last year. This performance was achieved despite a noticeable strengthening of the Indian Rupee against several major currencies including the US dollar and British pound during the last quarter of the year under review. The improvement in revenues and earnings during the year was driven by noticeably higher contribution from the US operations that posted a 25% growth over last year. The European operations delivered a growth of 28% over last year.

EBITDA for the year increased 36% to Rs 133.4 crore, implying an EBITDA margin of 16.2%. Net profit after tax was Rs 85.8 crore, implying a 50% rise over the net earnings of Rs 57.4 crore during the previous year (not taking into consideration contributions from the erstwhile DC JV).

Dividend

The audited results were taken on record at the Board Meeting held on July 19, 2007. At the meeting, the Board also recommended a final dividend of 90%. Including the interim dividend of 60% announced after the second quarter of the year under review, the total dividend for the year amounts to Rs 7.5 per share.