Megasoft Q4 net slips 90%

Revenues decline 18% due to loss of one of its largest clients in 2011

Megasoft Limited, a product-based telecommunications technology company, witnessed a 89.41% decline in its net profit to Rs 29 lakh for the fourth quarter ended December 2012, as against Rs 2.74 crore in the corresponding quarter in the previous year.

The company, which follows a January-to-December financial year, reported revenues of Rs 29.38 crore during the quarter under review, as against Rs 35.74 crore during the same period a year ago, a decline of 17.7% due to the loss of one of its largest clients in 2011, which had its first full impact in FY12.

For the full year ending December 2012, the company's net profit stood at Rs 1.17 crore, as against Rs 17.5 crore in FY11, registering a decline of 93.31%, while its revenues dipped 23.25% to Rs 115.4 crore (Rs 150.37 crore in FY11).

“FY12 has been a tough one on the operations of the company. While the company managed to stay operationally cash positive and also built a good pipeline for its products and solutions, capex spending is witnessing a slow down, resulting in slower uptake for the company's new products and applications,” said GV Kumar, chief executive officer of Megasoft.

The company plans to focus on small carrier infrastructure and retail mobile commerce, while maintaining a tight watch on cash flows and costs, he added.

Megasoft’s scrip is currently trading at Rs 8.80 on the BSE, up 1.15%, over the previous close of Rs 8.70 a share.