Mastek hasn’t felt any negative impact of slowdown in Europe & UK so far: MD

“So far we have not seen any negative comments coming from our customers. They continue to say that the company wants to be competitive and invest in digital and because our business is almost 90% plus digital, we have not seen or heard as of today any negative impact in terms of that overall budget and outlook,” says Ashank Desai, VC & MD, Mastek

The British Pound has hit a record low against the dollar. An important source of revenue comes into GBP. What is the impact?
All the companies including us do the hedging of all the currencies and so to a certain extent, we do get cover in terms of our total impact. However, the exact impact would have to be looked at the end of quarter when we announce the results.

What percentage of your billing happens in pounds? How do you hedge your positions?
We do not generally disclose pound versus dollar currency, but we disclose our revenues geography wise and Europe has been more than 60-65%. That trend is continuing. So, that is the kind of extent we have exposure to in European business, mostly the UK business.

How have the demand trends and client confidence looking like especially when it comes to the UK and the European region?
We have been tracking customer confidence by talking to them in terms of individual interactions and the feel of their budgets etc. So far we have not seen any negative comments coming from our customers. They continue to say that the company wants to be competitive and invest in digital because our business is almost 90% plus digital. We have not seen or heard as of today any negative impact in terms of that overall budget and outlook.

Let us talk about the headcount trend as well as the commentary coming from the likes of Accenture etc that attrition pressure is likely to continue and tight labour market conditions might stay this year. What is the situation at Mastek?
Yes, wage hikes and attrition as a trend seems to be stabilising, thanks to all the effect or impact and actions that were taken by the IT industry like all of us.

Hiring new trainees, training them, putting them on the job reduces the impact of attrition and that is being seen. However, it is still at the higher end. A good sign is this time it seems to be stabilising or going down but we need to still work on to see that attrition comes to a normal level. Otherwise, the impact of attrition on wages and margins will remain.

Any impact of the slowdown in Europe and UK in terms of order wins? How is the outlook changing because of what is happening in the macros?
As I said earlier, we have been talking to our customers and we have not seen negative comments coming from them in terms of their budgets over the next few quarters. When we announce our results, we will talk about orders received etc.