Mastek Q3 Results Updates, Mastek is an indian company that provides IT Solutions like cloud computing solutions, software development,etc. Mastek is a small cap company with market cap of 5,025 Crores.
Mastek slipped 3.11% to Rs 1,678.50 after the IT company’s consolidated net profit tumbled 18.86% to Rs 64.18 crore as against Rs 79.10 crore recorded in Q2 FY23.
Revenue from operations rose 5.34% to Rs 658.66 crore quarter ended 31 December 2022 from Rs 625.30 posted in Q2 FY23.
On a year on year (YoY) basis, the Mastek’s net profit declined 12.85% while revenue jumped 19.34% in Q3 FY23.
Operating EBITDA was at Rs 113.7 crore in Q3 FY23, up 5.9% quarter on quarter (QoQ) and down 2.2% YoY. Operating EBITDA margin stood at 17.3% in Q3 FY23 as against 17.2% in Q2 FY23 and 21.1% in Q3 FY22.
In dollar terms, the firm’s revenue was $80.1 million (CC growth of 3.1% QoQ and 20% YoY). The company added 31 new clients in Q3 FY23. Total active clients during Q3 FY23 were 444 as compared to 449 in Q2 FY23.
Mastek’s 12 months order backlog was Rs 1,705.8 crore ($206.2 million) as on 31 December 2022 as compared to Rs 1,522 crore ($187.1 million) in Q2 FY23, reflecting a growth of 12.1% in rupee terms and 5.3% in constant currency terms on QoQ basis and Rs 1,271.3 crore ($171.0 million) in Q3 FY22, reflecting growth of 34.2% in rupee terms and 29.7% in constant currency terms on YoY basis.
As on 31 December 2022, the company had a total of 5,687 employees, of which 4,140 employees were based offshore in India while the rest were at various onsite locations. Employee count at the end of 30 September 2022 was 5,810. Last twelve months attrition has reduced to 23.3% in Q3 FY23 in comparison with 24.2% in Q2 FY23.
The total cash, cash equivalents and fair value of mutual funds stood at Rs 324.9 crore as on 31 December 2022 as compared to Rs 351.6 crore at the end of 30 September 2022.
The board of directors has recommended an interim dividend Rs 7 per equity share, which will be paid to the eligible shareholders within 30 days. The record date for the same is fixed on Wednesday, 1 February 2023.
Hiral Chandrana, global chief executive officer of Mastek, said, ” At a group level we delivered revenue growth of 3.1% on quarter-on-quarter basis and 20% on year-on-year basis in constant currency. Acquisition of MST Solutions, a Summit level Salesforce partner has delivered above expectations, and our Top 40 accounts continue to grow across the digital engineering & cloud transformation portfolio. Our overall organic business did not perform as expected impacted by furloughs and seasonality. We made a strategic minority investment in Volteo Edge – an IoT platform that leverages ServiceNow in the Connected Enterprise & Data ecosystem. Our focus on people is showing results, attrition has been trending down last 3 quarters. “
Arun Agarwal, global chief financial officer at Mastek, said, ” Despite seasonally weak quarter and uncertain macro environment, we reported revenue growth of 5.3% QoQ and 19.3% on year-on-year basis in INR terms. Our cost-optimization strategies helped us to maintain an operating EBITDA margin of 17.3%.”
He further added, ” Our 12-months order backlog grew by 29.7% on year-onyear basis in constant currency. We added 31 new customers driven by continuous demand for digital engineering and cloud transformation services. Our board of directors have proposed an interim dividend of 140% or Rs 7 per share. We are optimistic that our disciplined execution and strategic priorities position us well to deliver industry leading growth in coming quarters and years. “
Meanwhile, the company’s board has also approved the allotment of 320,752 equity shares having face value of Rs 5 each fully paid up, at a price of Rs 1,856 per equity share in dematerialised form as part consideration. Further, the company is also in the process of discharging the balance consideration for the acquisition of 33,446 compulsorily convertible preference shares (CCPS) of its subsidiary, Mastek Enterprise Solutions (MESPL).
Consequent to the aforesaid allotment, the issued, subscribed, and paid-up share capital of the company has increased to 3,04,13,291 equity shares of Rs 5 each aggregating to Rs 15,20,66,455 from 3,00,92,539 equity shares, amounted to Rs 15,04,62,695.
Mastek Q3 Results Updates, Brokerage Share View On Mastek ?
Macquarie has a 55 percent potential upside on Mastek, which has been doing transformational M&A starting with Evosys. The brokerage says that Macquarie is showing signs of being able to enter large accounts and also expects it to be able to cross-sell other services. However, within the sub-$1 billion market capitalisation, Macquarie prefers Birlasoft over Mastek.