Subject: Mastek - improved margins; long term sustenance is key; result update Q2FY08; maintain Accumulate
Mastek (MAST IN, INR 342, maintain Accumulate)
Mastek's Q2FY08 (October-December) results were largely in line with our expectations with revenues up 3.6% and net profits growing 8% Q-o-Q. EBITDA margins improved significantly Q-o-Q by 280bps, but declined by 70bps Y-o-Y. The sequential improvement in the EBITDA margins was majorly due to the lack of wage hikes effected in the previous quarter (typically, wage hikes are effected in Q1 of every fiscal); improved productivity on fixed-price projects and better operational efficiencies also contributed to this improvement. The company is also exploring inorganic growth strategies and is targeting to close two deals with USD 15-20mn in revenue size each.
No comments:
Post a Comment