Mastek mulls digital biz entry

Company shortlisted by UK govt for a digital deal, says group chief financial officer

Software company Mastek is considering entering the digital space.

It had also been shortlisted by the UK for a digital deal of the government of that country, group Chief Financial Officer and finance director Farid Kazani told Business Standard on Thursday.

“The development is very much in its early stages… we have been chosen as one of the preferred vendors by the UK government for one of their digital deals,” he said, without specifying when the project would be awarded.

On Thursday, the company reported its earnings for the quarter ended December. Consolidated net profit stood at Rs 18.3 crore, a rise of 142 per cent compared to the year-ago period and 22 per cent on a sequential basis. It recorded a consolidated income of Rs 240.2 crore, 5.2 per cent more than in the year-ago period.

Multi-vendor programme
The company said the reprioritising of the multi-vendor transformation programme by a major North American client would have an impact on the company’s revenues.

“The drop in revenue would be about $2.4 million a quarter (based on December quarter revenues) until the programme regains momentum,” Kazani said. “The deal with the North American client has been kept on hold.”

In the coming quarters, the company planned to remain focused on its insurance and government verticals, as it saw deals building up, especially in the UK and North America, Kazani said.

“The shift in focus to high-end solutions has helped us improve operating margins and we are hoping the momentum continues,” said Kazani.

On India, Kazani said, “There are some deals with state governments and PSUs (public sector undertakings) in the pipeline, but these are likely to be postponed due to the (Lok Sabha) elections…We may see some slowdown in India deals in the coming months.”