Software solutions firm Mastek has indicated that its revenues from North America may decrease if a major client from the region were to put on hold a ‘multi-vendor transformation programme’.
“…a major North American customer is reprioritising its multi-vendor transformation programme. While the company is yet to receive an official intimation from the client, the re-planning by the customer is likely to result in the work being put on hold and as a result impact the revenue of the North American business,” the mid-size company informed the stock exchanges.
North America accounted for over half of the company’s revenues in the second quarter ended September 30, 2013.
The company said that it was too early to assess whether this development would have any bearing on the financial results for the third quarter ending December 31, 2013. “The company is engaged in discussions with the customer to better understand their plans and the impact of the pending changes on the company's plans - a clear picture is expected to emerge in next six to eight weeks,” it said.
Reacting to the development, the Mastek scrip hit an intra day low of Rs 136.25, before settling at Rs 140.55, about 7.62 per cent lower than Friday’s close.
Mastek said it continues to see traction for its insurance practice in North America. The Mumbai-headquartered firm, which also has presence in Canada, the UK, Europe and Asia-Pacific, is in line to bag key contracts from the US in coming months, it said.
During the period ended September 30, Mastek’s international revenues went up by 4.2 per cent to Rs 224 crore from Rs 215 crore in the year-ago period.
Net profit for the period more than doubled to Rs 15 crore from Rs 6.5 crore. The company currently has 113 active clients.