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Our Bureau

Mumbai, April 9 Tighter execution of existing contracts coupled with healthy addition in new customer accounts has propelled software solutions firm Mastek Ltd to record a 65 per cent surge in net profit for the third-quarter ended March 31.

The company’s net profit – without including contributions from the erstwhile Deloitte joint venture – increased to Rs 35 crore from Rs 21.22 crore in the corresponding quarter a year ago.

Excluding contributions from the Deloitte joint venture, Mastek’s revenue for the quarter ended March 31 rose by 22.2 per cent to Rs 238.8 crore (Rs 195.3 crore).

If the Deloitte joint venture numbers are considered, the company’s net profit went down by 12.8 per cent from Rs 40.23 crore; however, revenue was up by 11.1 per cent from Rs 214.79 crore. In March last year, Mastek had sold its entire equity stake in Mastek-DC Offshore Development Company Pvt Ltd to affiliates of Deloitte for an undisclosed amount.

Moreover, Mastek’s recent acquisition of the US-based Systems Task Group (STG) added about Rs 18 crore to the company’s top line.

Measures put in place for productivity and efficiency improvement had a positive impact of 200 basis points at the net profit level, said Mr RS Desikan, Group Chief Financial Officer.

Productivity and efficiency improvement are generally associated with the company’s ability to generate higher revenues with the same number of people on board.

This is achieved with software tools that can enable automation and thereby require fewer people for manual work.

Mastek, which follows a July 1-June 30 financial year, added about 11 new customers in the previous quarter.

For the April-June 2008 quarter, the company expects its net profit to be in the range of Rs 37-38 crore.

Consolidated net income is pegged to be between Rs 245 crore and Rs 250 crore.

Reacting to the development, the Mastek scrip hit an intra-day high of Rs 340 on the BSE, before settling down at Rs 322.85, 3.69 per cent higher than its previous close.

More Stories on : Financial Performance | Software

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