Mastek (MASTEK) Q4 02/03 earnings summary

Executive summary

• FY03 consolidated total income rose 30% YoY to Rs 3,794m; net profit increased 21% to Rs 503m, as the focus on large outsourcing engagements gained traction.

• International operations accounted for 98% of revenue; repeat business was 92%, with 69 active clients at year-end.

• US GAAP revenue reached $75.1m versus $58.5m; net income was $9.7m versus $8.6m.

Financial highlights

• Consolidated IT services and products income was Rs 3,721m versus Rs 2,869m; total income was Rs 3,794m versus Rs 2,926m.

• Consolidated PBT rose to Rs 571m from Rs 522m; PAT increased to Rs 503m from Rs 415m.

• Basic and diluted EPS were Rs 35.85 and Rs 34.98, respectively, versus Rs 29.14 and Rs 28.54.

• A 60% equity dividend was recommended; standalone income rose 21% and standalone net profit rose 32%.

Outlook and guidance

• FY04 growth was expected to exceed NASSCOM’s 17% industry forecast, supported by continued investment in people, processes, infrastructure and sales.

• Management prioritized long-term growth over near-term profitability; increased competition and sales and marketing investment were expected to pressure FY04 profitability and margins.

• Directors expressed confidence in improving performance, barring unforeseen circumstances.