MUMBAI: Shares of information technology firm Mastek Ltd. dropped to the
maximum permissible limit of 16 per cent in afternoon trade on Friday following
the firm's disappointing first quarter results, dealers said.
Mastek's net profit rose 22.2 per cent to Rs 69.9 million in the three months
ended September 30, while total income grew 12.5 per cent to Rs 250.8 million.
Its shares were locked at the lower end of the price band at Rs 1,881.91
while the benchmark Bombay index was down 1.76 per cent at 3,781.25.
Analysts said the market expected software firms to post much higher profit
growth. Many firms have registered an average 70-80 per cent growth in recent
quarters. Sector leaders Infosys Technologies and Satyam Computer Services both
posted over 100 per cent growth in the quarter ended September 30.
Analysts attributed Mastek's relatively poor performance to downsizing of an
order by a key client in April. "Recently, a key client of the company
downsized its order which has impacted both top and bottomline growth in the
first quarter," said Birla Sun Life software analyst Amit Khurana.
He said the company has taken initiatives to strengthen its presence in the
European markets, which should have a positive impact in the second quarter
results. Analysts expect the effect of this move to spillover to the second
quarter also.
"We continue to be positive on the company and will wait for the second
quarter results before taking a fresh view on the company," an analyst with
a domestic brokerage said.
Dealers said unwinding by traders had pushed the stock down on Friday.
"Funds have not pressed fresh sales in Friday trades. The stock is likely
to slip further as the result has not found favor with the market," a
dealer with institutional brokerage said.
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