The Hindu Business Line : Ten-fold rise in Mastek Q2 net; to pay 40 pc interim

MASTEK Ltd has reported a net profit of Rs 11.69 crore for its second quarter ended December 31, 2004. This is around 10 times the net profit of Rs 1.01 crore reported by the company for the corresponding quarter of the previous year.

Income from operations rose 83 per cent to Rs 46.71 crore (Rs 25.48 crore), while total income at Rs 47.23 per cent showed a 74 per cent growth. The company's UK operations rose 123 per cent in revenues to Rs 34.63 crore; and 107 per cent in profit before tax and interest to Rs 14.4 crore. Its US operations showed a marginal loss before tax and interest.

The company has announced an interim dividend of 40 per cent or Rs 2 per share with a face value of Rs 5.

For the Mastek group as a whole, new customer engagements as well as the robust growth of its European operations drove up net profit 213 per cent to Rs 12.8 crore, up from Rs 4.1 crore during the year-ago quarter.

Quarter revenues from UK operations grew 22 per cent and from the US declined 4 per cent. For the January-March 2005 quarter, Mastek group's income has been projected to be in the range of Rs 145 crore to Rs 150 crore and net profit after tax and minority interest to be in the range of Rs 13.25 crore to Rs 14.25 crore.

"This is against a healthy backlog of business of Rs 280 crore to be executed in the next twelve months," said Mr Ashank Desai, Chairman and Managing Director of the company.

The company's US operations were also looking up with five new clients added recently, he said. In addition, there are two large UK contracts worth £5 million; these are three-year contracts that will keep the revenues rolling in, he said.

Mastek Ltd has divested a further 30 per cent stake (valued at £307,000) in favour of its partner Capita Group Plc in its IT-enabled services joint venture Capital Mastek BPO Pvt Ltd, having already divested 60 per cent in it to Capita last November. "We have obliged Capita's demand for a larger stake in the company, Capita being a very good IT customer of ours," said Mr Desai.

This will have no bearing on Mastek's other BPO concerns — the Mastek Carrekar venture, which is into payment processing, as well as Mastek Ltd's own BPO activities, said Mr Desai.

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