Ashank Desai, VC and MD,
The British pound hit a record high against the dollar. An important source of income comes in GBP. What is the impact ?
All companies, including us, hedge all currencies and so to some extent we get hedged in terms of our total impact. However, the exact impact should be reviewed at the end of the quarter when we announce the results.
What percentage of your billing is in pounds? How do you hedge your positions?
We don’t typically disclose the pound against the dollar, but we do disclose our revenue geographically and Europe has been 60-65% better. This trend continues. So that’s the kind of exposure we’re exposed to in European companies, primarily UK companies.
What are the demand trends and customer confidence looking like, especially with regards to the UK and European region?
We tracked customer confidence by talking to them in terms of individual interactions and how their budgets felt, etc. So far, we haven’t seen any negative feedback from our customers. They keep saying the company wants to be competitive and invest in digital because our business is almost 90% and more digital. We have not seen or heard of any negative impact to date in terms of overall budget and outlook.
Let’s talk about the headcount trend as well as comments coming from Accenture etc that the attrition pressure is likely to continue and the tight labor market conditions may continue this year. What is the situation at Mastek?
Yes, salary increases and attrition as a trend seem to be stabilizing, thanks to all the effects or impacts and actions that have been taken by the IT industry like all of us.
Hiring new interns, training them, putting them to work reduces the impact of attrition and it shows. However, it remains in the high end. A good sign is that this time it seems to be stabilizing or falling, but we still have to work to see that attrition returns to a normal level. Otherwise, the impact of attrition on wages and margins will persist.
An impact of the slowdown in Europe and the United Kingdom in terms of order intake? How does the outlook change because of what happens in the macros?
As I said earlier, we have spoken with our clients and have not seen any negative feedback from them regarding their budgets over the next few quarters. When we announce our results, we will talk about orders received, etc.
