Thursday, software firm Mastek Ltd. reported a lower net profit for the third-quarter, reflecting weakened pound sterling, slowdown in customer accounts and delays in the initiation of some projects.

Consolidated Results

The Ahmedabad-based company reported third-quarter consolidated net profit of Rs.33.38 crore, down 5% from Rs.35.08 crore in the year-ago quarter. On a sequential basis, the net profit for the quarter rose 7%.

However, on a per share basis, earnings for the quarter rose marginally to Rs.12.41 per share from Rs.12.29 per share in the third quarter of 2008.

The company's quarterly total operating revenue fell marginally to Rs.231.11 crore from Rs.233.34 crore in the year-ago quarter. Other income during the quarter was Rs.1.91 crore, lower than Rs.5.53 crore for the same period last year.

Geographical-wise Revenues

During the quarter, revenue from UK operations declined 12% to Rs.126.45 crore from Rs.143.62 crore in the year-ago quarter, while revenue from US operations rose 30 % to Rs.87.81 crore from Rs.67.48 crore in the corresponding quarter last year. Revenue from others was Rs.16.85 crore, down 24% from Rs.22.24 crore in the third quarter of 2008.

North America contributed 38% to the total revenue, with Europe and others contributing 55% and 7% respectively.

During the quarter under review, the company added 2 new customers in the face of a difficult business environment. Also, the company added 24 people, taking the total manpower strength to 4,023 as on March 31, 2009.

For the nine-month period, the company's consolidated net profit grew 21% to Rs.105.89 crore from Rs.87.31 crore for the nine-month period in 2008. Total revenue, including other income, rose 13% to Rs.750.87 crore from Rs.666.34 crore for the comparable period last year.

Standalone Results

Mastek posted third-quarter standalone net profit of Rs.22.86 crore, down 29% from Rs.32.03 crore in the third quarter of 2008. Total income, including other income, totaled Rs.140.92 crore, down 6% from Rs.149.49 crore in the prior year quarter.

For the first nine months, the company's standalone net profit amounted to Rs.71.99 crore, 6% higher than Rs.67.70 crore in the corresponding period last year. Total income, including other income, grew 5% to Rs.456.85 crores from Rs.435.44 crore for the nine-month period ended March 31, 2008.

As on March 31, 2009, the company's order book was Rs.387 crore, compared to Rs.453 crore in the sequentially preceding quarter. The decline in order book position was led by slowdown in demand and delays in initiation of some projects that thus could not be included in the order book, the company said.

Looking ahead, the company expects fourth-quarter consolidated net profit to be in the range of Rs.30 crore to Rs.32 crore, on total income ranging between Rs.220 core and Rs.230 crore.

The company has assumed a foreign exchange rate of GBP 1 = Rs.71.50 and US$1 = Rs.50.24, which is the same as the actual exchange rate for the third quarter.

Sudhakar Ram, Chairman and Managing Director, said, Our performance for the quarter demonstrates our ability to maintain profitability without under-investing for future growth, even as the prevailing economic scenario remains tough and exchange rate headwinds continue to impact our operations.

At the BSE, Mastek closed Thursday's trading at Rs.146.55, up by Rs.14.10 or 10.65% on a volume of 1.38 lakh shares. The company's scrip touched an intraday high of Rs.152.00 and an intraday low of Rs.135.00.

For comments and feedback: contact editorial@rttnews.com