Mascot recorded a topline growth of 30.4% and a growth of 63% in net profits (without considering extrodinary items) on a QoQ basis. Excluding extra ordinary items the company recorded a drop of 36% in net profits on QoQ basis. The figures on a YoY basis are a whooping 700% growth in topline and net profit figure stood at Rs 153 m compared to losses of Rs 14 m.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares
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In 2QFY01 the operating margins had improved significantly from 14% in 1QFY01 to 17%. But in 3QFY01 the operating margin has not improved compared to 2QFY01. It has remained stagnant at around 17%, infact has dropped marginally. This marrs the performance because of two reasons. Firstly this is quite low compared to industry standards (around 30%) and secondly giants like Wipro have managed to show a good improvement in margins.
According to the company the new business acquired does have a potential to be shifted offshore. Therefore, there is a scope of improving operating margins. The offshore contribution was quite low to the revenues at 16.3%.
The extra ordinary item of Rs 93 m is due to an acquisition of US $ 2.2 m being written off. The acquisition is expected to bring estimated revenues of Rs 220 m for the 2HFY01.
The geographic break up of revenues is 69% from the United States, 9% from Europe and 22% from Asia Pacific region. As the contribution from Europe is low the company may grow on business from this region in the future.
At a current market price of Rs 295, The stock is trading at P/E multiple 33.5 of times its 3QFY01 annualised earnings. Excluding the effect of extraordinary item the P/E multiple is 13 times 3QFY01 annualised earnings.
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