Mastek Q3 profit jumps 22% to Rs 18.3 cr, margin up 270 bps

"While there may be a short term impact due to the North American account ramp-down, I am confident that we will be able to grow both revenues and margins over the next few quarters," Ram said.

There will be a drop of USD 2.4 million in revenues per quarter (based on December quarter revenues) due to reprioritising of the multi-vendor transformation program by a major North American customer that resulted in a slowdown in the program implementation. This loss will be per quarter until the program regains momentum.

However, the company said it continues to see good momentum in its insurance business in North America and is confident of bridging this gap in revenue over the next few quarters.

On the operational front, earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 24 percent to Rs 35.8 crore and operating profit margin expanded 270 basis points to 14.8 percent compared to previous quarter.

Billable utilisation declined to 81.2 percent during the December quarter as compared to 81.5 percent in earlier quarter.

Order book

Its 12-month order book of the IT company declined sequentially to Rs 513 crore (USD 83 million) as on December 2013 from Rs 558 crore (USD 89.1 million) at the end of September quarter, a 8 percent drop.

The company added two new clients during the quarter, taking to total 123 clients (last twelve months) as of December 2013.

Cash and cash equivalent stood at Rs 249.4 crore in the quarter gone by as against Rs 250.7 crore in previous quarter.

Meanwhile, Mastek on January 8 announced buyback offer of maximum 32 lakh equity shares and minimum 9.5 lakh shares, at a price not exceeding Rs 250 per share. The company aims to spend upto Rs 54.5 crore for this buyback.