Mastek’s business is likely to grow much faster in the US, than its stronghold UK, as the company gears up to cross-sell to customers of recently acquired US technology services provider Vector Insurance Services, Chief Financial Officer R Desikan has said.
Annual revenues from the US are seen growing 60-70 per cent over the next three years, as the base is still small, he said. “Thereafter the growth rate should reduce to around 50 per cent.”
Currently, US business accounts for 30 per cent of Mastek’s revenue, while UK accounts for nearly 65 per cent. Growth in UK is likely to be around 20 per cent per year, Desikan said in an interview.
Rupee impact
The rupee’s appreciation against the British pound is unlikely to hit the company’s October-December earnings, because the rise has been steep only in the last month, Desikan said. During this period Mastek is covered by a foreign exchange hedge, he added.
Since October the rupee has risen 3.6 per cent against the pound.
Over the long haul, the company is ready to bear the impact of this appreciation in the rupee, Desikan said.
“We are going to reduce our sales and general administrative cost, utilise efficiency tools so that fewer man hours are spent on work, increase offshoring of work, and bill clients higher by adding value to the services offered.”
Overall operating margin in 2007-08 is likely to improve 100 basis points, and in 2008-09 it is seen rising 100-150 bps, he said.
Buy line
Mastek is now in the process of conducting knowledge transfer to Vector Insurance, Desikan said. This process should take around three months. Thereafter,
Mastek will offshore some existing work from Vector, and cross-sell its insurance offerings to Vector’s 35 customers, he said.
Mastek acquired US-based Vector Insurance Services in July. The company remains steadfast in its plans to acquire more companies in the US and UK that can complement its existing offerings, Desikan said.
Mastek is in acquisition talks with two-three players and is eyeing companies in property and casualty insurance segment.
“We currently don’t have any offering in the P&C (property and casualty)segment,” Desikan said. Mastek is also seeking a company with intellectual property rights for a product in the health segment, he said. The budget for each acquisition is $10 million-$25 million, Desikan said.
Mastek shares ended at Rs 332.05 on National Stock Exchange on Friday, up 0.7 per cent from the previous close.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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