Mastek Sept-quarter net widens on impact of wage hikes, project transition costs

Software services firm Mastek's Sept-quarter reported a consolidated net loss of Rs27.28 crore for the quarter ended 30 September 2011, impacted by increase in wages and a project transition cost.
 
The company had posted a net loss of Rs13.46 crore in the July-September quarter last year, it said in a BSE statement.

''The last quarter has seen some revival in demand which is reflected in our revenue figures. However, profitability has been impacted due to operational (salary hikes and project transition costs) and non-operational (forex movement) factors," Mastek Chairman and Group CEO Sudhakar Ram said in a statement.
 
"We are hopeful that the losses sustained this quarter would be recouped to a large extent by the end of the year through increased revenue contribution and operational efficiencies that we continuously focus on," Ram's statement added.
 
"The economic scenario in Europe continues to be fluid and we are keeping a close watch on the changing market scenario. As mentioned in the last quarter, the traction from UK continues to be on the upswing and the growth this quarter from UK is a reflection of the same,'' he said.
 
Its total income rose to Rs158.16 crore during the quarter under review, against Rs151.35 crore in the same period year-ago.
 
On standalone basis, the company posted a net loss of Rs25 crore, against a net loss of Rs14.77 crore in the same quarter previous fiscal.
 
The firm had raised wages by about 11 per cent for the offshore employees and 3 per cent for onshore employees, while it also incurred a transition cost of about Rs2.5 crore for a new project in the UK.
 
Mastek, which follows a July-June financial year, saw operating EBITDA for the quarter shrink by Rs11.6 crore compared to the previous quarter.
 
During the quarter under review, the company's post-tax earnings included the impact of the mark to market losses to the tune of Rs7.3 crore on forex exposures.
 
During the quarter, Mastek added 4 new customers. As on September 30, 2011, its 12-month order backlog stood at Rs326 crore, higher by 5.5 per cent in rupee terms over the previous quarter.