Company - Farid Kazani, Group CFO and Finance Director Mastek
Source: Business Line
The worst is over for Mastek
What went wrong during those six quarters? (of Reported losses): During these six quarters, revenue was at an abysmally lower level of $32-33 million per quarter. At that level, it was difficult for the company to remain profitable, considering we continued the product development spends in the insurance segment.
Staggered salary hikes: We gave a salary hike of 8 per cent for offshore and 3.5 per cent onsite. We decided to give salary hikes up to a particular level in July and decided to move the cycle by one quarter for the remaining staff. It made sense to us as we have sheltered the profit and loss account by staggering the wage hike over two quarters.
Buyback of shares: The board has approved buyback of up to Rs 36 cr (at up to Rs 175 a share). Our cash balance has improved to Rs 152 cr as of September 2012. One of the methods to improve shareholders’ returns is through buyback of shares.
De-focus from Asia-Pacific: These markets are fragmented and projects are smaller. We are focusing on North America and if we spread ourselves too thin everywhere across Asia Pacific we cannot achieve scale.
Outlook for the next two quarters: Assuming the rupee to be at Rs 52-53, we should be able to do well in the next two quarters and should do better than industry average growth for the full year.
Looking forward: The revenues have grown consistently for the last five quarters, we have turned around and have been profitable from the December quarter. I would say the worst is over for Mastek.
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