Mastek Q3 net falls, trims guidance

Mastek has posted a net profit of Rs 5.4 crore for the third quarter ended March 31, 2003, down 28 per cent compared to a net profit of Rs 7.52 crore for the quarter ended March 31, 2002. Total income of the IT player has, however, increased from Rs 26.62 crore in the March quarter of 2002 to Rs 31.25 crore in the March quarter 2003.

Mastek group, ie Mastek and its wholly-owned subsidiaries in US, UK, Germany, Belgium, Singapore, Malaysia and proportionate share from its joint venture with Deloitte, has posted a net profit of Rs 16.03 crore for the quarter ended March 31, 2003, up 45 per cent compared to a net profit of Rs 11.03 crore for the quarter ended March 31, 2002. Total revenue has also increased from Rs 72.54 crore in March 2002 quarter to Rs 99.06 crore in the March 2003 quarter.

Mastek, meanwhile, has reset its revenue and profit expectations for the fiscal year ending June 30, 2003.

Commenting on the performance and the guidance for the next quarter, Ashank Desai, chairman and managing director, said, "Although the performance during the last quarter appeared satisfactory in terms of profit objectives, past couple of weeks have been quite challenging. Based on the performance during these weeks, the April-June quarter performance of the company will not fall in line with the growth momentum of the past six quarters."

Desai further said, "Apart from factors like dependence on simultaneous ramp-ups of project-based business from large percentage of customers and normally probable competitive losses, there were also a few surprises in terms of decision postponements and order-size reductions. Lengthening internal decision processes and focus on short-term performance partly caused by economic and other external uncertainties are some of the main factors leading to these developments. In short, from the revenue perspective, many of the strategic customers are not ramping up as fast as we expected."

"The impact of this on profits would be compounded as in line with our next fiscal year's internal stretch targets, we have already committed to investments in staff, delivery infrastructure and sales and marketing initiatives."