Mastek shares drop 4% after margins, profits slide in Q1FY25 results

Shares of Mastek fell as much as 4.4 per cent at Rs 2,693 per share on the BSE in Thursday's intraday deals. This came after the technology service provider delivered its quarter one earnings for the financial year 2024-25 (Q1FY25) on Thursday.

The company reported a 2 per cent year on year (YoY) jump in its net profits at Rs 71.5 crore in Q1FY25 as against Rs 70 crore in the corresponding quarter last year. Sequentially, the profit was down by 24.3 per cent, the company said in a statement. 

Meanwhile, the company’s consolidated revenues from operations soared 12.1 per cent YoY at Rs 813 crore versus Rs 785 crore in the June quarter last year. 

However, the operating profit or earnings before interest, tax, depreciation and amortisation (Ebitda) slipped by 2.4 per cent YoY at Rs 124 crore compared to Rs 127 crore in Q1FY24. 

Similarly, Mastek’s Ebitda margin also declined to 15.2 per cent for the quarter under review as against 16 in the same quarter last year. The profit margin also came down to 8.8 per cent during the quarter versus 12 per cent in the June quarter of FY24.

The company stated that it added 13 new clients in Q1FY25. However its total active clients during Q1FY25 were 391 as compared to 430 in Q4FY24. 

Moreover Mastek’s 12 months order backlog stood at  Rs 2,168.8 crore as on 30 th June, 2024 as compared to Rs 1,763.9 crore in Q1FY24, reflecting growth of 23.0 per cent in rupee terms and 21.0 per cent in constant currency terms on a Y-o-Y basis. 

The company has a total market capitalisation of Rs 8,677.87 crore, according to BSE. The company’s shares are trading at a price to earnings multiple of 76.95 times with an earning per share of Rs 36.63

At 02:41 PM, shares of Mastek recovered most of its losses and were trading 0.22 per cent lower at Rs 2,818.75 per share. In comparison, the BSE Sensex was trading 0.77 per cent higher at 81,335 levels. 

Mastek, a business and technology service provider offers digital transformation services for public and private enterprises.