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Mastek climbs after Q1 PAT jumps 20% QoQ

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Mastek rose 4.77% to Rs 521.50 after consolidated net profit surged 19.61% to Rs 46.58 crore on 14.67% increase in net sales to Rs 386.06 crore in Q1 June 2020 over Q4 March 2020.

Consolidated profit before tax (PBT) soared 43.82% to Rs 70.92 crore in Q1 June 2020 as against Rs 49.31 crore in Q4 March 2020. Current tax expense for the quarter spurted 22.83% at Rs 17.70 crore as against Rs 14.41 crore in Q4 March 2020.

The company reported one-time exceptional loss of Rs 17.55 crore in Q4 March 2020, which included material provisions for doubtful debts on certain revenue contracts (Mastek India and US); write back of contingent consideration (Mastek US); and legal and professional costs (UK and India) relating to the business combination consummated in Q4 March 2020.

Consolidated total EBITDA rose 12% to Rs 84.80 crore in Q1 FY21 as against Rs 75.7 crore in Q4 FY20. Total EBITDA margin stood at 21.1% in Q1 FY21 compared with 21.4% in Q4 FY20. The Q1 result was declared after market hours yesterday, 29 July 2020.

Mastek added 48 new clients in Q1 FY21. Total client count as of 30 June 2020 stood at 504 (LTM) as compared to 436 (LTM) in Q4 FY20.

The 12-month order backlog was Rs 764.50 crore ($101.30 million) as on 30 June 2020 over Rs 785.10 crore ($103.80 million) in Q4 FY20, reflecting a decline of 2.6% in rupee terms and 2.2% in constant currency terms on Q‐o‐Q (quarter-on-quarter) basis and Rs 602.70 crore ($87.30 million) in Q1 FY20 reflecting a growth of 26.8% in rupee terms and 17.4% in constant currency terms on Y‐o‐Y (year-on-year) basis.

As on 30 June 2020, Mastek had a total of 3,321 employees, of which 2,227 employees were based offshore in India while the rest were at various onsite locations. Employee count at the end of 31 March 2020 was at 3,404.

The total cash, cash equivalents and fair value of mutual funds stood at Rs 458.20 crore as on 30 June 2020 as compared to Rs 414.70 crore at the end of 31 March 2020, registering a 10.48% Y-o-Y jump. Net cash balance (after adjusting for debts) stood at Rs 173 crore as on 30 June 2020 as compared to Rs 81 crore at the end of 31 March 2020. Mastek repaid loan of $6 million during Q1 FY21 while the total borrowing was at $37.6 million as of 30 June 2020.

Commenting on the Q1 FY21 earnings, John Owen, the group CEO of Mastek, has said that: "No company is immune from the inevitable global headwinds of COVID‐19 therefore, I am especially pleased Mastek exits Q1 with a healthy order backlog, revenue growth and solid cash flows primarily driven by a restricted exposure to those sectors that have been hardest hit by COVID-19. Our relentless focus on operational efficiencies has aided us to report strong top line growth of 14.7% and maintained a healthy Operating EBITDA margin of 17.6%."

He further added that: "Our quarter's performance is a clear demonstration of our resilient business model, deep relationship with our customers and improving diversified geographical reach. It also reveals the outstanding commitment of our employees and leadership during this unprecedented times. We are confident and have clear tactical strategy of Cut & Grow to navigate the short-term challenges and make the most of future growth opportunities. Our integration of Evosys biz continues to be in line with our expectations. I take this opportunity to thank the loyal support and trust of our customers and the committed Mastekeer's team who serve them with exceptional pride, honour and dedication."

Meanwhile, Majesco USA has decided to sell its company to a private equity, Thomas Bravo, LP at $13.10 per share. Mastek (UK) currently owns 2,018,192 equity shares of Majesco USA. Hence, Mastek will receive approximately $26.4 million or Rs 200 crore as consideration from the deal.

Mastek is a publicly held leading IT player with global operations providing enterprise solutions to government, retail and financial services organizations worldwide.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 30 2020. 11:37 IST