Shares of Mastek, the digital engineering and cloud computing service provider declined as much as 3.5 percent on Tuesday after the company's net profit dropped nearly 20 percent from the September quarter.

Mastek reported a net profit of Rs 64.2 crore for the December period. The drop in profit is also due to an exceptional gain in the previous quarter due to the sale of a non-core asset.

The company's revenue in US Dollar terms increased 2.6 percent quarter-on-quarter to $80.1 million, led by the MST acquisition. Mastek said that the organic business did not perform as expected due to furloughs and seasonality.

After declining for seven quarters in a row, Mastek's EBITDA margin rose 12 basis points from the previous quarter.

The company attributed the weak organic growth in the quarter to slow National Health Services growth in the UK. Revenue contribution from the country declined to 58.9 percent in the December quarter from 70 percent six quarters prior. Revenue from the UK business has also declined for three quarters in a row.

On the supply side, the company's attrition dropped to 23.3 percent from 24.2 percent in the September quarter. There was also a sequential drop of 2.1 percent or 123 employees during the quarter.

Mastek's board also approved an interim dividend of Rs 7 per share, record date for which has been set as February 1.

Shares of Mastek recovered from the day's low to end 1.4 percent lower at Rs 1,705.90.

(Edited by : Rukmani Krishna)

First Published:Jan 17, 2023 3:46 PM IST