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Mastek Q3 net up 38 pct, meets forecast

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CIOL Bureau
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MUMBAI: Indian software services group Mastek said on Monday its quarterly net profit rose 38 percent, in line with its forecast, as its key European operations remained buoyant.



The mid-sized company, which kicked off earnings from India's software sector, said net profit rose to 138 million rupees for its fiscal third-quarter ended March 31 from 100 million a year earlier.



Revenue climbed to 1.5 billion rupees from 1.18 billion.



Mastek had forecast third-quarter net profit at 132.5 million to 142.5 million rupees on revenue of 1.45 billion to 1.5 billion rupees.



Unlike most other Indian software services providers, Mastek earns much of its revenue from Europe -- 67 percent at the end of the third quarter.



It has been making an attempt to penetrate the U.S. market and while its U.S. operations broke even in the past quarter, the company said it was still dissatisfied with its performance there.



U.S. revenues declined by 5 percent in the third quarter, while European revenues grew 12 percent.



Mastek's chief executive officer, Sudhakar Ram, will shift base to the United States to steer the business.



Mastek forecast April-June net profit at 142.5 million to 152.5 million rupees. It saw fourth-quarter revenue at 1.52 billion to 1.57 billion rupees.



Mastek said it billed three additional customers during the quarter. These include an order worth $2.5 million from a U.S. insurance company to implement a new back office system for its distribution arms and a $2 million order from a U.S. investment company for a customer data warehousing project.



Its shares were down 0.73 percent at 374.7 rupees at the Bombay Stock Exchange, where the broader market was more than 1 percent down.



Mastek is in the process of expanding its facilities to cater to business growth.



It is investing 280 million rupees for a facility in the western city of Pune and 490 million rupees for another software development center near Bombay. It also plans to set up a development center in Madras.

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