IT services company Mastek targets surpassing $250 million in revenue by 2016

MUMBAI: Mastek Ltd, the Mumbai-based mid-sized information technology services company, expects to achieve more than $250 million in revenue and is targeting an operating margin of 15.8% by 2016, as it focuses on selling more of its high-value insurance products and lessens its dependence on commoditized servicing offerings.

The growth and margin outlook comes as Mastek is emerging from the two troubled years it faced from 2009 to 2011, when clients cut back on projects and plunged the company into the red and forced a suspension of its dividends. Multiple management changes didn’t help either; the company had three CEOs in those two years.

But with its insurance and government-niche recovering from the depths of the downturn, Mastek is benefiting in terms of margin and pipeline growth, Group CFO Farid Kazani told ET in an interview.

“We are focusing on solutions and our specialized verticals to grow. Currently the traction in the pipeline is good and the deal sizes are also recovering,” Kazani said.

The Mumbai-based company, which was one of the first IT service providers to go public, will also start chasing government deals by itself, where it previously partnered with larger firms.

“In the past we could not go directly, because our balance sheet size did not allow that and no one recognises a small mid-tier company from India. But we are known now, and we have made the right entry,” Kazani said.

He added that the company had already registered on the UK government’s G-Cloud initiative, which was designed to drive down costs by allowing public sector bodies to rent services from suppliers as needed rather than sign up to lengthy contracts, and was close to winning a few deals.