Thread by @ValueEducator

#Mastek Q3 22 Concall Highlights 💻🖱

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Numbers Update -
1. The revenue for Q3 was 551.9 cr up by 3.4% QoQ and 24.6% YoY

2. Operating margin stood at 21.1%, it was flat QoQ

3. The order backlog stands at 171 million dollars up by 9.9% QoQ and 33.7% YoY

4. PAT stood at 83.5 cr up by 2.4% QoQ and 18.7% YoY

5. The cash holding as of Q3 932.3 cr

6. In Q3 added 7 new fortune 1000 clients, added 25 new customers in Q3.

7. The overall headcount stands at 4785, 275 added in this quarter.

Business Updates -

1. Opened a centre in Romania, continues to see traction in Europe especially in the Nordic and Netherlands region.

2. Mastek is looking to hire more freshers and also planning to hire lateral talent, and will be looking to hire more talent in Q4.

3.Onboarded by NHS as one of the 12th service provider for an 800 million dollar framework.

4. Traction is seen in demand for oracle in the European market.

5. QoQ attrition has stabilised or moreover has been flat, seeing attrition coming under control.

6. Significant engagement with army, won deals with city councils, vehicle certification agency added a new department and hoping to get more deals in this fiscal year.

7. As the 60 million dollar deal through NHS is a 4 year deal the entire 60 million dollars is not included in the 12 month order backlog.

8. There are certain costs that the company is able to pass on and there are few costs that the company has to bear on the company level, company is not expecting any reduction in margins due to increase in costs in the near term.

9. Formed a cross functional team to focus on M&A from the perspective of build, buy and partner, It can be around CX, customer engagement, cloud platform or data and intelligence automation.

10. When Mastek says manage service it talks about SaaS and cloud based managed services i.e transforming client from on premise to cloud.

11. Sales Force is another platform on which Mastek is bullish and building a pipeline on that end. AWS saw good traction in the UK, Sales Force, Service now are part of strategy. Not planning to build capability on SAP or any platform directly competing with oracle.

12. Public business is primarily focused by the onshore headcount.
A 25 - 30 million dollar deal would be considered as a large deal in the UK and it would be around 5 million in the US.

13. The company will get to sequential growth from Q4

14. In Oracle business the managed services part of it is 30% and 70% is implementation.

15. In talks with 2 or 3 cloud cyber security companies in order to partner with them.

16. In Microsoft Azure and AWS Mastek is looking to build capabilities in house also keeping an eye on M&A here.

17. Seeking a good traction from manufacturing centric clients as well as healthcare and life sciences.

New Offering-

Application Enhancement Service (AES) -
Mastek has started to get multi million dollar deals from here with multi year offerings, the Idea here is to reduce the errors for end users through automation.

UK Business -

1. The UK business grew by 2.3% QoQ, muted growth due to reduction in private sector deals
2. In the UK the focus is on the Microfinance and financial services component, retail and consumer segment.

US Business-

1. In the US it also did one integrated deal i.e managed services of Mastek and Oracle for a client which lead to cash transformation from front office to back office it also had other technologies such as Sales Force.

2. In the US the QoQ growth was 5%, there were strong order booking from healthcare verticals across all the verticals, the Digital business here grew by 30.7% YoY.

3. In Q3 the pipeline in the US was the largest, It increased by 7% - 8% QoQ.

4. The America business saw a strong momentum on the Oracle side winning larger deals, one of the clients is a big trucking and logistics company.

Middle East Business -
1. In the Middle east the focus is on lesser number of clients but higher revenue, this is to improve the quality of business and improve margins.

2. In Uk, US and Europe the margins are much better as compared to APAC and the Middle east.

India Business -

The India business grew by 6% QoQ and 21.2% YoY, healthy growth was seen in the oracle side.