Mastek Group has recorded a 22 per cent rise in net profit at Rs 50.5 crore (Rs 505 million) for the year ended June 30, 2003, compared to Rs 41.4 crore (Rs 414 million) posted in the previous year.    

The total income in the period under review also rose by 30 per cent at Rs 380.2 crore (Rs 3.8 billion) as against Rs 292.6 crore (Rs 2.92 billion) registered in last year, Mastek said in a release in Mumbai on Monday.

For the fourth quarter ended June, net profit, however, declined by 85.29 per cent at Rs 3 crore (20.4 crore in Q4 of last year). This includes Rs 1.5 crore (Rs 15 million) of expenses incurred on its business process outsourcing operations, it said adding, the total income increased to Rs 92.1 crore (Rs 90.1 crore).

Referring to the outlook for 2004, Mastek said it expects the consolidated group income to grow to Rs 460 crores (Rs 4.6 billion) while net profit would be Rs 35 crore (Rs 350 million).

Mastek chairman and managing director Ashank Desai said, "We saw a significant increase in the order flow this quarter, as compared to the last quarter. Some of them were large and long terms annuity type engagements. However, we have seen a sustained margin pressure on the new deals".

"Within four to six quarters of the US economy reviving, we expect a major surge in offshore outsourcing to India. We have consciously decided not to compromise on the sales and marketing effort that has worked quite well", he said.

"On the other hand, gross margins will be under substantial pressure due to customer expectations of aggressive pricing and this would lead to an adverse impact on the bottom line", he added.

Mastek said during the year, the company spent Rs 42 crore (Rs 420 million) on capital expenditure as compared to Rs 7.5 crore (Rs 75 million) in 2002.

During Q4, Mastek made a major foray into the banking domain in the US through the formation of Carretek LLC in association with Carreker Corporation, provider of technology and consulting solutions.