Mastek down 16% on group profit warning

MUMBAI: Shares of Indian information technology firm Mastek Ltd. on Wednesday

was down around 16 per cent in an otherwise flat market after the group said it

was likely to report a lower profit in the current quarter.

At 10:33 a.m. (0503 GMT), the stock was down Rs 50.85 at Rs 271, while the

benchmark 30-share Bombay index was 0.56 per cent up at 3,848.24.

"The pressure had begun to show in the last two quarters for the company

and the results of the quarter ended December will bring out the difference

between tier one and tier two firms," said Amit Khurana, analyst at Birla

Sunlife Securities.

"The 100 per cent growth rates are a thing of the past and the sector

has to adjust to more realistic and sustainable growth rates of around 50 per

cent," he added. The Mastek Group said in a statement on Tuesday that its

net profit in the quarter ended December 31, could fall by 60 to 70 per cent

from the previous quarter and that its revenue may be lower by five to seven per

cent. Mastek Ltd. is the flagship firm of the group.

A recent slowdown in technology expenditure and a slew of profit warnings

from industry heavyweights in the US have led to fears that Indian software

exports, 60 per cent of which are to the United States, could be affected.

(C) Reuters Limited 2000.