Mastek, a mid-sized software player does not appear to have witnessed any significant revival in its fortunes after being affected by the financial crisis.

In FY10, the company witnessed a steep decline in revenues as well as profits.

In the recent September quarter, Mastek reported losses.

Rising wage bill, impact of a tepid macro-environment in Europe clubbed with downtrend in key operating metrics has strained the company's financials.

Mastek has seen revenues from Europe (mainly the UK) decline significantly over the last few quarters.

In the September quarter, revenues from Europe declined by over 23 per cent compared with the same period in 2009.

This geography contributes over 50 per cent of Mastek's revenues. Even the North American revenues have fallen significantly.

The company has indicated that it may take two-three quarters for operations to stabilise.

The proportion of fixed-price contracts, which ensure better realisations than time and material billing deals, have declined from 45 per cent levels to less than 38 per cent.

The insurance vertical is showing stability, while government and financial services segments continue to see declining revenues.

Despite high utilisation levels (81 per cent-plus), subdued revenues suggest that billing rates continue to be under pressure.

Mastek would hope that the Rs 312 crore order-book (nearly 43 per cent of FY10 revenues)and the addition of a couple of new clients help it turn the tide.

K. Venkatasubramanian

Related Stories:
Mastek's US arm buys SEG Software
Key metrics strain Mastek's financials in Sept quarter

(This article was published in the Business Line print edition dated December 12, 2010)
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