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Mastek: Repeat performance

Apr 12, 2001

For the 3QFY01 Mastek has posted a drop in sales of 10% compared to 2QFY01 and the net profits have dropped by 98%. This huge plunge in profits is due to the company's operating margins coming down to 14.5% from 25.5% in 2QFY01. The fall in operating margins is due to 560 basis points increase in employee costs. Traveling costs for the company have also gone up by another 360 basis points.

On a YoY basis the net profit figure has gone down by 99% and the total income figure has dropped by 22%.

(Rs m) 2QFY01 3QFY01 Change
Sales 209.0 188.2 -10.0%
Other income 2.0 3.3 65.0%
Expenditure 155.8 161.0 3.3%
Operating Profit (EBDIT) 53.2 27.2 -48.9%
Operating Profit Margin (%) 25.5% 14.5%  
Interest 0.1 0.4 300.0%
Depreciation 20.3 29.8 46.8%
Profit before Tax 34.8 0.3 -99.1%
Tax 6.8 0.0 -100.0%
Profit after Tax/(Loss) 28.0 0.3 -98.9%
Net profit margin (%) 13.4% 0.2%  
Diluted number of shares 6.9 6.9  
Diluted Earnings per share* 16.2 0.2 -98.9%
P/E (at current price) 6.0 557.8  
*(annualised)      

According to the company the drop in sales is due to softness in demand for front end solutions in the US and longer time to close in on deals the company was hoping for .

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