Mastek (MASTEK) Q4 97/98 earnings summary

Executive summary

• Consolidated revenue rose 45% YoY to Rs 10,075 lakh; standalone revenue increased 13% to Rs 3,703 lakh, while standalone net profit fell 27% to Rs 282 lakh.

• International operations generated 95% of consolidated income, with strong US and UK growth offset by a severe Asia Pacific downturn and weak domestic demand.

Financial highlights

• Consolidated income was Rs 10,075 lakh vs Rs 6,955 lakh; reported consolidated PBT was a loss of Rs 19 lakh and PAT a loss of Rs 58 lakh, including a Rs 341 lakh exceptional item.

• Standalone income rose to Rs 3,703 lakh from Rs 3,278 lakh; PBT fell to Rs 282 lakh from Rs 395 lakh and PAT to Rs 282 lakh from Rs 388 lakh.

• Standalone exports increased 21% to Rs 2,862 lakh; domestic income declined to Rs 552 lakh from Rs 761 lakh.

• Standalone operating cash flow was Rs 62 lakh, compared with an outflow of Rs 470 lakh in FY96/97; debtor growth absorbed working capital.

Outlook and guidance

• US operations targeted growth above 80% for FY98/99, supported by added sales and delivery staff and a new East Coast office.

• UK sales and marketing investment aimed to move the operation from among the top five Indian firms in the UK to the top three.

• Expansion plans included subsidiaries in Germany, Belgium and Switzerland, plus a Japan office; some operations were expected to start in FY98/99.

• Directors expected international operations to grow faster, barring unforeseen circumstances; Asia Pacific recovery was expected to take two to three years.