Mastek eyes margin in 17%-19% range with easing concerns on furloughs in Q4

Digital engineering and cloud transformation company Mastek aims to maintain its margin trajectory in the 17%-19% range, Global CEO Hiral Chandrana said on January 19, a day after the firm reported its third quarter results.

In a post-earnings chat with CNBC-TV18, Chandrana noted that Mastek touched a 17% margin in the October to December 2023 quarter versus 16.1% in the preceding fiscal even as it announced wage hikes in the period under review.

The global CEO of the Mumbai-based firm said he was confident of an increase in margin in the coming quarters, but noted that it is likely to remain in the 17-19% range, which would allow for investments in new solutions and capabilities.

In the December ended quarter, Mastek saw a 1.5% growth in topline at $94 million, compared to $92.6 million in the last quarter. Its revenue grew 2.45% sequentially to ₹784.3 crore from ₹765.5 crore in the September ended quarter. Its profit after tax (PAT) increased 19.9% on a quarter-on-quarter basis to ₹75.3 crore.

Chandrana highlighted that the firm’s order book has increased by 21% and added that the company is optimistic about deal momentum and demand environment.

He also pointed out that the Biz Analytica, which was acquired in August, has significantly contributed to the full quarter revenue. The division contributed $4 million in Q3 and $2.5 million in Q2, he noted.

Reflecting on furloughs, he said Q3 is traditionally a furlough quarter both for the UK as well the US. However, in Mastek's digital business, particularly in the public sector, there is a continuous and healthy growth and Chandrana anticipates a normal and solid quarter with an increase in working days.