Mastek (MASTEK) Q4 04/05 earnings summary

Executive summary

• Record FY05 total income of Rs 5,766 million, up 27% YoY; net profit rose 84% to Rs 534 million.

• Growth was led by UK operations and insurance; the strategic focus expanded toward systems integration, solutions and offshore delivery.

Financial highlights

• Consolidated revenue from IT services and products was Rs 5,670.08 million vs Rs 4,424.70 million; total income was Rs 5,766.49 million vs Rs 4,534.98 million.

• Profit before tax rose to Rs 725.52 million from Rs 466.03 million; profit for the year reached Rs 534.51 million vs Rs 290.51 million.

• Operating profit was Rs 980.1 million, up 35%; net profit margin improved to 9.3% from 6.4%, aided by fixed-price execution and lower selling and G&A expense growth.

• Operating cash flow reached Rs 780.0 million vs Rs 586.2 million; cash and equivalents including liquid investments were Rs 1,105.5 million at year-end.

Outlook and guidance

• Management expected growth momentum to continue, citing a healthy opening order backlog, strategic market positioning, partnerships and global delivery capabilities.

• Directors were hopeful of improved performance, barring unforeseen circumstances; DCOTG’s next-year focus was to improve operations and operating margins.

• NASSCOM projected Indian IT-ITES exports to grow 30–32% in FY06; IT software and services were projected at 25–27% growth and ITES-BPO at 40–42%.