Abhishek Singh, Chief Financial Officer (CEO), Mastek Limited, talks about strategies of the company for 2021, deal pipeline and geographies where growth opportunities are visible during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: We are talking about 2021 now, so how bullish you are about the sector and the company? Also, tell us about the three big strategies/ plans that Mastek has lined up for 2021?
A: A wave of digital transformation was there in the pre-COVID era and it has increased a lot. But the biggest thing is about Cloud, as every company that was operating in the cloud space will be benefitted a lot from it. Cloud was a cost-saving endeavour, earlier, and now, it has become a business imperative that you should have infrastructure on the cloud, so all your participants, like employees, customers and vendors, can participate in it. So, the cloud has become a business enabler today and Mastek is getting its benefits. We bought Abacus at the start of the year, which had a very good hold at SaaS. At COVID time, we saw a good acceleration in the business, pipeline, order book and revenue conversion. There has been a profit on the margin. So, if you will talk about three things then clearly cloud will be in the first position. An endeavour of digital transformation to make economies, companies, geographies digital is running everywhere. If we will talk about the UK, the government is focusing on it. If we will talk about the public sector, then the government is focused. And if we talk about the private sector companies, maybe it is retail or financial services, everyone is focusing on it. So, these are the two themes on which Mastek is focusing a lot and is trying to continuously increase its offerings in the cloud space.
Q: How do you see the deal pipeline and which geographies are looking more promising, although the uncertainty of COVID/ the pandemic is still on?
A: I think, the UK is at a very strong footing for Mastek at present. Earlier, we have also said, once there is clarity on Brexit and political certainty will come then it will complement the business. And, that is visible in the public sector space, where big and medium scale deals are present and they are deals of the longer horizon. So, the pipeline has become quite robust there. And, we have made a continuous investment there, whose benefit we can see right now. And, Brexit-driven some demands are converting now. As of now, the UK will come out of the European Union in the next 6-12 weeks and will remain its informal member till December 31, 2021, so in that timeframe, all the departments will have to prepare its IT infrastructure for the new UK, future UK, which will be out from the European Union, where borders will be present, customs will be there, trade-tariffs will be in place. And, the IT infrastructure will be required for the preparation of all these factors. So, the public sector is quite robust in the EU and the UK. If we move from there then cloud-based services are in demand in the overall private sector and we are sustaining it though Evosys. If we will talk about US geography, then we are seeing an opportunity for vendor consolidation in the retail space. Retailers are looking at new ways to reach out to their customers and we are helping them in it. There is a unique benefit with Mastek that we are taking all the three solutions, onshore, nearshore and offshore, to our customers. So, such an engagement is being created. But if seen chronologically then clearly UK public sector, cloud-driven Evosys business and the US are our number 1, 2 and 3 growth areas for us.
Q: The stock which was worth Rs 170 in March has gone up to more than Rs 1000, now. Did you expect such a growth momentum and tremendous performance and do you have any further appetite?
A: This is a matter of business fundamentals and share price is just a perspective. I will not say that the companys robustness is reflected from the share price or its weakness is highlighted by its share prices, but it is a barometer. Even when it was Rs 170, then also it was significantly discounted and 60-70% of the market capitalization was in form of cash. So, it was overly discounted at that time and today when you are seeing it above Rs 1000 then it is reflecting the business performance. So, I will say that we are focusing on the performance and fundamentals are quite strong and things will be brighter going forward.