BackMastek sees growth revival in January, eyes buy in FY10
Mastek sees growth revival in January, eyes buy in FY10
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Mumbai: Software firm Mastek Ltd expects its business to be under pressure until January 2010 when its revenue growth may revive and hopes to close an acquisition in the current fiscal year, its chief said on Wednesday.
Last month, Mastek, which provides software solutions to insurance, government and financial services firms, forecast total income of Rs1.95-2.05 billion for the first quarter ending September, lower than Rs2.62 billion last year.
“In our business, we think that from January onwards there should be signs of growth," chairman and managing director Sudhakar Ram said at a media briefing.
“This projection was based on the company’s pipeline and order visibility," he said, adding he expected to close some deals by the end of the calendar year.
“There are deals, but how far they will close is the question," he said.
“The pressure on billing rates continued," founder and board member R. Sundar said.
After a scorching pace of growth for years, India’s export-led outsourcing sector has been battling a slowdown over the past year as global customers struggled to stay afloat, went bust or tackled severe cost cuts, crimping technology spending.
Acquisition
“Mastek was looking for acquisitions across all its business verticals, with annual revenue of $20-$30 million," Ram said.
“There are conversations. We definitely want to close something in this financial year," he said.
“The company was likely to fund a possible deal from its cash accruals of $50 million," Sundar said. “Debt could be availed too," Ram added.
Separately, Ram said that the share of insurance services to the total revenue is expected to rise to 40-45% in three years, from about 30-32% in the year ended June, aided by growth in its Elixir suite of products.
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