In This Article:
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Revenue: $103 million, 9.4% year-over-year growth in USD terms.
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Order Backlog: $250 million, with a recent $40 million deal increasing it by 8-9%.
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Revenue (INR): INR 870 crores, 10.9% year-over-year growth in INR terms.
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Operating EBITDA Margin: 16.2%, a reduction of 30 bps quarter-on-quarter.
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Profit After Tax: INR 94.7 crores, 21.8% year-over-year increase.
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Gross Cash: INR 497 crores, with a reduction in DSO from 96 to 89 days.
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Borrowings: INR 602 crores as of December 31, down from INR 641 crores in September.
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Headcount: 5,260, down from 5,505 in September 2024.
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Utilization Rate: 74.4%, down from 78.4% in the previous quarter.
Release Date: January 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Mastek Ltd (BOM:523704) reported a 9.4% year-over-year revenue growth in US dollar terms, reaching $103 million for the quarter.
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The company's 12-month order backlog stands at $250 million, with a recent $40 million deal further boosting the backlog by 8-9%.
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The UK business is performing well, particularly in secured government services and healthcare, with significant new deals and renewals.
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Mastek Ltd is focusing on an AI-first approach, launching new AI initiatives such as ADOPT.AI and Lightbeam, which are expected to enhance service delivery.
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The company has improved its cash position, with gross cash at INR497 crores, and reduced its borrowing from INR641 crores to INR602 crores.
Negative Points
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The furlough period had a more pronounced impact than expected, leading to flat revenue growth in constant currency terms.
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Operating EBITDA margin decreased by 30 basis points quarter-on-quarter, affected by salary hikes and currency headwinds.
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The AMEA region's margins were significantly low at 1% this quarter, with plans to improve them to double digits over the coming quarters.
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The company's utilization rate dropped to 74.4% from 78.4% in the previous quarter, reflecting higher leaves and client furloughs.
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There is a decline in the digital commerce and experience business, attributed to a shift away from Oracle Commerce and Oracle ATG.
Q & A Highlights
Q: As we go into FY26, how does the demand environment look in the UK, particularly regarding digital programs from the home office and NHS? What growth rate do you anticipate in each geography? A: We expect a healthy backlog entering FY26, particularly in the UK, with high growth expectations. The NHS and healthcare sectors are key spending areas, focusing on prevention and data-driven decision-making. The secured government services and private sector are also seeing renewed focus and expansion. In the US, while the macroeconomic outlook is positive, growth will consolidate over the next few quarters, with full potential growth expected by H1 of next year. - Umang Nahata, CEO