BANGALORE: Indian information technology group Mastek, comprising flagship
firm Mastek Ltd. and six fully-owned overseas subsidiaries, expects its net
profit to fall by 60 to 70 per cent in the quarter ending December 31, 2000,
from the previous quarter.
The company in a statement on Tuesday also warned that its revenues could
fall by five to seven per cent in the same quarter due to delays in closing
large accounts with significant offshore potential.
The Mastek Group reported a net profit of Rs 85.8 million ($1.84 million) in
the quarter ended September 30, 2000, against Rs 67.1 million in the year-ago
period. Its total revenue rose to Rs 685.4 million in the same quarter from Rs
608.5 million a year ago.
"The company has expressed fears that the group's profitability would be
further impacted by provisions made against dues from a dotcom customer who is
yet to receive an additional round of funding," Mastek said in the
statement, which was also sent to the Bombay Stock Exchange.
The Mastek Group includes fully-owned subsidiaries in the United States,
United Kingdom, Germany, Belgium, Singapore and Malaysia.
Mastek said its board of directors will meet on January 12, 2001, to announce
the quarterly results.
Mastek is the first Indian technology company to issue such a harsh profit
warning amid market talk of an expected slowdown in the Indian software sector.
On Tuesday, shares of Mastek Ltd. ended about eight per cent lower at a
16-month low of Rs 321.85 at the Bombay Stock Exchange, in line with a sharp
fall in technology stocks.
Bombay's main 30-share index ended over two per cent down at 3,826.82.
A slowdown in tech spending in the United States and a tide of earnings
warnings from industry leaders have prompted fears that Indian software firms'
export prospects would be hit.
The US accounts for about 60 per cent of India's booming software exports.
($1 = 46.645 Indian rupees).
(C) Reuters Limited 2000.