Mastek Q2: Net jumps 41%, income up 30%

Mumbai, Maharashtra, India, Wednesday, October 11, 2006 - Mastek Group today announced a total income of Rs. 198.9 crores for the quarter July-September 2006 against:

Rs. 153.1 crores achieved during July-September 2005.

Rs. 193.4 crores earned during April-June 2006.

Net profit for the quarter stood at Rs. 21.2 crores against:

Rs. 15 crores for the corresponding quarter in the previous year.

Rs. 20.6 crores during April-June 2006.

The un-audited results were taken on record at the Board Meeting held on October 11, 2006.

Commenting on the operations, Mr. Sudhakar Ram, the Chief Executive Officer, said " I am happy with the results achieved this quarter, especially with both the UK and US operations registering strong growth. Although the order booking was below expectations, I do see a significant up-shift in the next quarter, based on a strong pipe-line.

Guidance

For the October-December 2006 quarter, Mastek expects the Group Income to be in the range of Rs 204 to 209 crores and Net Profit after Tax and Minority interest to be in the range of Rs. 21.5 to 22.5 crores.

Performance Highlights : July - September 2006.

Mastek delivered another steady quarter of Revenues and Profits. The quarter was marked by growth in its major geographies and a steady build-up in sales pipe-line. Mastek continued to strengthen its relationships with existing customers, by obtaining new engagements amidst stiff competition from global SI companies. Mastek's deliveries were of high quality and were appreciated by the customers.

During the quarter, revenues from European operations grew by 42% over the corresponding quarter last year while revenues from US operation increased by 35% in the same period. Presently, Europe contributes 65% and US contributes 19% to the Group revenue.

In the UK, besides deepening its relationship with its major customers, Mastek won a major multi year deal with an existing customer, a large FTSE 250 Financial Services organisation. Mastek's delivery team once again delivered successfully against the key milestones set for the quarter. There was significant growth in the existing accounts resulting in higher revenues. Mastek's French operation will start generating revenues from quarter Q2. The pipeline in both Insurance and non-Insurance in UK continues to be strong with a high probability of new customer acquisitions in the coming quarters.

In the US, there was a good growth in the existing accounts. Mastek won a large project implementation for a Credit Union Insurance company in the area of Collateral Protection. Mastek successfully delivered number of large and mission critical projects to its clients notably to a large internet property firm for their budgeting and forecasting operations, Fortune/500 Property and Casualty Insurance firm for their Commercial Auto Division & Fortune/500 Life and Annuities company for their contract administration business functions. MajescoMastek is currently working on multiple opportunities in Insurance space.

During the quarter, Mastek Asia Pacific (MAP) secured a reinsurance project with one of the world's Top 20 life insurance companies. The existing accounts showed good growth during the quarter. MAP is currently pursuing significant business opportunities in the Insurance space and it is expected to convert these into new order booking in the coming quarters.

Insurance continues to be a major thrust area for Mastek and it continues to invest in its Elixir platform. Based on the Industry Analyst reports (Gartner and Celent), large and mid-sized insurance companies from the US will be looking for new technology policy administration/management platforms. This will create new opportunities for Mastek and Elixir platform would be well-suited to meet the requirements.

ITeS : Mastek's BPO operations, located at Mahape and Pune, serve as the delivery arm of Carretek LLC, Mastek's joint venture with Carreker Corporation. The focus is on payment processing operations for a large international bank based in US. It has successfully transitioned 3 mission critical and complex processes that have been fully ramped up. Currently selected staff is under training for transitioning one more process which is expected to be completed in the next 6 months. The BPO operations are certified under BS 7799 and ISO 9001:2000.

DCOTG - The Mastek-Deloitte JV had a slower start to the new year with a ramp down in some projects and delays in starting some newer engagements resulting in drop in revenues and profits. DCOTG continues to improve its overall quality and risk management processes and is aggressively looking at its practice administration expenses to ensure that margins are protected.

About Mastek:

Mastek, is a Rs. 701 cr., US $ 156 million (July 2005 - June 2006) publicly held, global IT application outsourcing company with global operations, that delivers cost effective quality solutions as per the customized requirements of Fortune 1000 organizations worldwide. With its principal offshore delivery facility based at Mumbai, India, Mastek operates across US, Europe, Japan and Asia Pacific regions. Incorporated in 1982, Mastek has been in the forefront of technology, which along with proven methodologies and processes, increase IT value generation to its customers through onsite and offshore deliveries.

Mastek follows methodologies that generate substantial value to its customers by reducing time-to-market and ensuring a high level of predictability in the time, cost and quality of its projects. The company also focuses on enhancing value for its customers by providing substantially superior IT solutions at a lower cost.

For detailed results, please visit our Web Site http://www.mastek.com