Orderbook intake to improve post Q2: Mastek

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In an interview with CNBC-TV18, Sudhakar Ram, Chairman, Managing Director and Chief Executive Officer of Mastek , spoke about the company and the its growth plans.

Here is a verbatim transcript of an exclusive interview with Sudhakar Ram on CNBC-TV18. Also watch the accompanying video.

Q: Are you seeing the order intake improve after your second quarter numbers? Are things on the mend?

A: We do expect October-November-December to start showing improvements in terms of orderbook and the following quarters to translate them into revenues. We pretty much stay on track and expect the orderbook, which was actually declining over the last three quarters, to start improving from this quarter.

When I see a longer term thing especially for Mastek which is at the solutions play, we see a lot more business in the transformation end of the industry coming up as the economy revives. Therefore, we see good potential for third wave companies, which are focused on high end solutions especially in markets like the US or UK.

Q: I am not expecting you to change your guidance at this juncture. You are expected a revenue growth of 4% QoQ and PAT of 6% QoQ. Would you say that now you are more optimistic about the kind of guidance you gave and believe that bit of outperformance is possible?

A: We don't talk about this quarter's performance during the quarter but we stick to our guidance. So we do see an order improvement and minor increases in revenue as we had projected translating to a better bottom-line performance. However, whatever we had guided in the beginning of the quarter remains our projection as we stand now.

Q: How significant you sense the NHS ramp down will be over the quarter or the next fiscal year? Would you be able to find a suitable substitute to make up on the revenue front?

A: The NHS got completed in our first quarter, ended in September. So there are hardly any revenues on this project. So we are taking the complete ramp down on the project Face and Spine, which is the main program done by us under NHS and any growth that we are projecting both in terms of orders and revenues are going to be around different segments. We see insurance being the lead segments for us.

We see better activity as companies both in the US and UK are looking at making major transformation investments there so that it is going to be one of our primary segments of growth. We would also see other government programs which are much smaller than NHS in the pipeline. It should start accumulating over the revenue in the next three-four quarters.

Q: Are the billings better than what they were said a quarter ago?

A: The billing rates are pretty much stabilized. We didn't have much of a problem on billing rates except in the services part of our portfolio. In most of our business works around solutions, we don't see billing rates to be an issue.

Q: What about the hiring? When do you see that may happen because we have got some pretty positive rumblings from big IT giants in the past couple of days on a possible increase in hiring come first-second quarter calendar year 2010?

A: I believe, the services companies which are largely based on capacities will see an earlier rise in hiring because their business flows will start earlier. Solution companies like us are depending on customers having the optimism to actually start up major transformation programs. Therefore, we don't see any great hiring happening in this quarter or in the next. We do expect our virtual bench to pretty much come down to zero by next quarter, which is January-February-March.