Mastek Q3 Results: Profit falls 20% YoY to Rs 67 crore; revenue jumps 19.3%

Smallcap IT company Mastek on Tuesday reported a 19.6% year-on-year (YoY) decline in its consolidated net profit to Rs 67.1 crore for the quarter ended December 31, 2022. The company had reported a net profit of Rs 83.5 crore in the same quarter of the previous fiscal year.

However, Mastek clocked a 19.3% increase in the revenue from operations at Rs 658.7 crore during October-December 2022 period as against Rs 551.9 crore clocked in the year-ago period. Meanwhile, the operating EBITDA of the company stood at Rs 113.7 crore in Q3FY23, down 2.2% YoY.

After the Q3 results announcement, shares of Mastek cracked about 3.8% to Rs 1,667 apiece.

The board of directors of the company also recommended an interim dividend of 140% or Rs 7 per share at the meeting held today.

The 12-month order backlog of Mastek was AT Rs 1,705.8 crore ($206.2 mn) as of 31st December 2022 compared with Rs 1,271.3 crore ($171.0 mn) in Q3FY22, reflecting growth of 34.2% in rupee terms and 29.7% in constant currency terms on a YoY basis, the company said in a release.

The company added 31 new clients in Q3FY23, while the total active clients during Q3FY23 were 444 as compared to 449 in Q2FY23, it said.

Our overall organic business did not perform as expected, impacted by furloughs and seasonality, Hiral Chandrana, Global Chief Executive Officer, Mastek said.

"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. 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 since last 3 quarters," Hiral said.

Mastek is an underperforming stock with a negative return of 47% in the last one year. The stock in the past six months has also generated a negative return of 15%.