Mastek skid after Q1 PAT declines 4% QoQ to Rs 84 cr

Mastek fell 1.34% to Rs 2,050.60 after the IT company reported a 4.4% decline in consolidated net profit to Rs 84.4 on 1.9% decrease in revenue from operations to Rs 570.3 crore in Q1 FY23 over Q4 FY22.

On a year on year (YoY) basis, Mastek's net profit rose 5.2% and revenue from operations grew 10.4%.

Total EBITDA was Rs 135 crore in Q1 FY23, down 2.6% quarter on quarter (QoQ) and up 14.9% year on year (YoY). Total EBITDA margin stood at 22.6% in Q1 FY23 as against 23.1% in Q4 FY22 and 22.5% in Q1 FY22.

The company added 33 new clients in Q1 FY23. Total active clients during Q1 FY23 were 402 as compared to 450 in Q4 FY22.

The company's 12 months order backlog was Rs 1,509.3 crore ($191.1 million) as on 30 June 2022 as compared to Rs 1,469.1 crore ($193.8 million) in Q4 FY22, registering a growth of 2.7% in rupee terms and 4% in constant currency terms on QoQ basis and Rs 1,177.7 crore ($158.4 million) in Q1 FY22, reflecting a growth of 28.2% in rupee terms and 31.1% in constant currency terms on YoY basis.

As on 30 June 2022, the company had a total of 5,553 employees, of which 4,208 employees were based offshore in India while the rest were at various onsite locations. Employee count at the end of 31 March 2022 was 4,977.

The total cash, cash equivalents and fair value of mutual funds stood at Rs 664.6 crore as on 30 June 2022 as compared to Rs 794 crore at the end of 31 March 2022. Net cash balance (after adjusting for debts) stood at Rs 490 crore as on 30 June 2022 as compared to Rs 603.3 crore at the end of 31 March 2022.

Commenting on the Q1 FY23 results, Hiral Chandrana, global chief executive officer of Mastek, said, We reported constant currency revenue growth of 13.4% on year on year basis and continued to deliver business outcomes for our clients across digital engineering and cloud transformation engagements. It was a challenging quarter impacted by pause of a key program in a large account, currency impact, slower than expected ramp ups and delayed decision making on few deals. Having said that, our pipeline has grown, win ratios have improved, our focus on account mining and annuity business is yielding results."

Chandrana further said, "In line with our Vision 2025, we have acquired MST Solutions, a Summit level Salesforce Consulting partner with strong presence in Americas and marquee Fortune 1000 clients. We welcome the MST Solutions team to our family. We are confident about the fundamentals of our strategy and committed to driving differentiated growth as we continue to partner with clients to Decomplex Digital with Trust, Value and Velocity.

Arun Agarwal, global chief financial officer of Mastek, said, We reported operating margin of 19.2% during the quarter despite currency impact, continued investments and increase in hiring costs. We have undertaken several appropriate steps to scale supply and talent acquisition, the results of which would start reflecting in the coming quarters. Resilience of our business is demonstrated in 12-month order backlog of $191 million as of 30 June 2022 which grew by 31% YoY in constant currency. Acquisition of MST Solutions further enhances our integrated offerings across Digital Experience and transformation and strengthens our presence in US geography. Demand environment continues to be strong, and we are confident that our strategic priorities and execution rigor positions us well to achieve our Vision 2025.

Mastek is an IT company providing enterprise digital and cloud transformation services to the Government/ public sector, health and life science, retail and financial service sectors. The company's service offering includes, application development, Oracle suite & cloud migration, digital commerce, application support & maintenance, BI & analytics, assurance & testing and agile consulting.

Powered by Capital Market - Live News