Commenting on the spectacular show, chairman and managing director, Ashank Desai, said the fast pace of growth was the vindication of Mastek's business strategy of investing in subsidiaries and supporting global growth plans through investments in offshore development centres. The company has recently entered the customer relationship management (CRM) solutions area, in which it will focus on the US and European markets.

The Mastek group has posted a net profit of Rs 6.71 crore, an increase of 689 per cent and a group revenue of Rs 60.85 crore, an increase of 83 per cent over the same quarter last year.

Mastek was assessed at Level 4 of the capability of maturity model of Software Engineering Institute of US and is aiming for Level 5, the highest. Mastek is setting up new infrastructure and the third phase of expansion, involving an investment of Rs 4.8 crore, was completed during the quarter.

INSIGHT
Net margins may fall

Mastek has achieved outstanding financial results for the second quarter in the running. Though growth has mellowed on a quarter-to-quarter basis, the company's profitability has improved considerably. Its focus on higher value adding activities has resulted in an improvement in net margin from 7 per cent for the quarter ended June to 25 per cent. However, the company is currently putting up new factories in Mumbai and Pune for which it has taken on additional debt. Once these are commissioned, the resulting higher interest and depreciation may lead to a temporary fall in net margins.

Sarad Saraf