Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P a t i e n c e w e a r i n g t h i n …
Mastek reported Q1FY12 revenues which were above our estimates.
Revenue growth of 3.6% in US$ and 7.7% in rupee terms was pleasing.
However, EBIT margins at -18.6% were below our -9.9% estimate led by
wage hikes (11% offshore and 3.5% onsite) and transition cost for the UK
project while vector goodwill write-off (| 6.5 crore) and forex losses of |
7.3 crore ensured that reported loss of | 27.3 crore was way below our |
9.8 crore loss estimate. Though the quantum of revenue growth was a
positive surprise, we believe operational prudence – through better cost
management - should have been the priority this quarter given overall
weakness in the company.
ƒ Q1FY12 earnings summary: revenue beat/EPS way below
Mastek reported Q1FY12 revenues of | 155.3 crore ahead of our |
143.8 crore estimate and net loss of | 27.3 crore vs. our | 9.8 crore
loss estimate. Revenues grew 7.7% QoQ. EBITDA margins came in
at -14.1% vs. our -5.0% estimate and -2.1% in Q4FY11. The margins
were affected mostly due to wage hikes of 11% offshore and 3.5%
onsite and effect of transition costs of 1.5%.
ƒ Operating metric highlights
Mastek added four new insurance clients in Q1FY12 taking the
active client base to 91 vs. 89 in Q4FY11. Onsite utilisation declined
0.3 pp to 93.4% vs. 93.7% in Q4FY11. Offshore utilisation improved
1 pp to 83.4% vs. 82.4% in Q4FY11. Government and insurance
vertical revenues increased by 34% QoQ and 5.3% QoQ,
respectively, whereas other financial services declined by 0.4%
QoQ. Development revenue grew by 15.1% QoQ whereas
maintenance declined by 4% QoQ in Q1FY12.
V a l u a t i o n
Though revenue growth of 7.7% in rupee terms was positive this quarter,
the operational performance was bleak. We believe cost should have
been managed better and the operational performance should have been
the priority. We maintain our HOLD rating but reduce our price target to |
90 and value the stock at 0.5x its | 171 book value vs. 0.6x | 184 earlier.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P a t i e n c e w e a r i n g t h i n …
Mastek reported Q1FY12 revenues which were above our estimates.
Revenue growth of 3.6% in US$ and 7.7% in rupee terms was pleasing.
However, EBIT margins at -18.6% were below our -9.9% estimate led by
wage hikes (11% offshore and 3.5% onsite) and transition cost for the UK
project while vector goodwill write-off (| 6.5 crore) and forex losses of |
7.3 crore ensured that reported loss of | 27.3 crore was way below our |
9.8 crore loss estimate. Though the quantum of revenue growth was a
positive surprise, we believe operational prudence – through better cost
management - should have been the priority this quarter given overall
weakness in the company.
ƒ Q1FY12 earnings summary: revenue beat/EPS way below
Mastek reported Q1FY12 revenues of | 155.3 crore ahead of our |
143.8 crore estimate and net loss of | 27.3 crore vs. our | 9.8 crore
loss estimate. Revenues grew 7.7% QoQ. EBITDA margins came in
at -14.1% vs. our -5.0% estimate and -2.1% in Q4FY11. The margins
were affected mostly due to wage hikes of 11% offshore and 3.5%
onsite and effect of transition costs of 1.5%.
ƒ Operating metric highlights
Mastek added four new insurance clients in Q1FY12 taking the
active client base to 91 vs. 89 in Q4FY11. Onsite utilisation declined
0.3 pp to 93.4% vs. 93.7% in Q4FY11. Offshore utilisation improved
1 pp to 83.4% vs. 82.4% in Q4FY11. Government and insurance
vertical revenues increased by 34% QoQ and 5.3% QoQ,
respectively, whereas other financial services declined by 0.4%
QoQ. Development revenue grew by 15.1% QoQ whereas
maintenance declined by 4% QoQ in Q1FY12.
V a l u a t i o n
Though revenue growth of 7.7% in rupee terms was positive this quarter,
the operational performance was bleak. We believe cost should have
been managed better and the operational performance should have been
the priority. We maintain our HOLD rating but reduce our price target to |
90 and value the stock at 0.5x its | 171 book value vs. 0.6x | 184 earlier.
No comments:
Post a Comment