Mastek plans to hire 700 staff this year

By Rosemary Arackaparambil

BOMBAY: Mastek plans to increase staff strength by about 60 percent in the current year as it moves to achieve its targeted 42-52 percent profit growth, its chairman said on Thursday. "We are hiring 700 people this year...our expected growth won't happen without adding people," Ashank Desai told Reuters in an interview. Its financial year runs from July to June.

The group, which includes Bombay-listed Mastek Ltd., global subsidiaries and a joint venture with Deloitte Consulting, had 1,157 people on its rolls at the end of June. For the current year, Mastek has forecast its total group revenue, including last year's joint venture with Deloitte which currently has about 15 clients, at Rs 4.18 to 4.32 billion ($86.2-89.0 million) and net profit in the range of Rs 540-580 million.

Mastek shares were up 1.5 percent at Rs 381 in late afternoon trade at the Bombay Stock Exchange, whose main index was flat. The shares have risen 261 percent in the past year. A focus on targeting large-sized orders and alliances with firms that have access to big clients helped the group beat expectations with a three-fold jump in net profit to Rs 417 million in the past year, he said.

One such successful alliance is with London-based business process outsourcing company Capita Group Plc, through which Mastek won a $10 million order last year to develop software for a traffic congestion monitoring system in London. Mastek, which has subsidiaries in the United Kingdom, Belgium, Germany, the United States, Singapore and Malaysia, earns 63 percent of its revenue from Europe unlike other Indian software firms which get over 60 percent from the United States.

The company's share of income from the United States slid to 25 percent from 44 percent a year earlier. "We took a dip in the United States to get the quality of accounts (clients) straightened out and the slowdown added to that," he said.

But Desai said Mastek was refocusing on the United States, where business potential was huge especially because of a big interest in offshore outsourcing seen there, and aimed to bring back its share of revenues to about 50 percent in a few years.

Mastek is seeing a larger number of client additions in the United States though the volume of business was still coming from Europe, he said. Desai said Mastek continued to look for acquisitions to aid growth, but nothing was firmed up yet.

The company, unlike other Indian software firms, is however in no hurry to jump onto the business process outsourcing bandwagon, Desai said, adding that it may appoint a consultant to advise it on whether to enter the business. Several Indian software firms including Infosys Technologies, Wipro and Satyam have set up or acquired units to perform back-office services in a bid to expand revenue avenues. ($1 = Rs 48.51)

© Reuters