Mascot Systems rallied for the second day in a row on Thursday boosted by the company's buying out the BPO business of Delhi based IT company IT&T.
As a result, Mascot Systems climbed 3.5% on BSE to Rs 108.30. The scrip hit a high of Rs 109.35, earlier. Around 13,000 Mascot Systems shares changed hands on BSE by the end of an hour of trading. The battered stock had surged 8% to Rs 104.65 on Wednesday on volumes of 35,900 shares.
The stock of the software company has not had it this good for a long time now. From Rs 163.25 on 13 December 2002, the stock plunged 41.5% to Rs 95.50 on 31 March 2003.
Mascot Systems on Wednesday announced its entry into the IT-enabled services segment with the proposed acquisition of the contact center and facility management businesses of Delhi based outsource services provider IT&T. The company has signed an agreement to acquire as a going concern, IT&T's BPO business, by way of a business purchase. It will also acquire IT&T's facility management business by buying out IT&T Technology Services, a subsidiary of IT&T. The acquisition is subject to approval by Mascot's board of directors of the terms and conditions of agreement and other statutory and regulatory approvals as may be applicable.
The BPO business will be garnered by Mascot for a cash consideration of Rs 18.88 crore ($3.95 million) while the facility management business will cost Rs 2.39 crore ($0.50 million). The acquisition will bring the BPO business of IT&T as a going concern, including over 400 employees, its infrastructure, equipment, facilities, contracts and intellectual property.
Early this year, Mascot Systems had said that it was looking at investing in the business process outsourcing space over the next 12 to 18 months and was also considering acquisition of companies in this space in India. The company said it was planning to acquire early stage BPO companies with 300 to 500 agents, either into call centres or transaction processing (claims management, post sales support, etc.).
In another major development, the company on Tuesday announced a strategic alliance with Nihon Unisys, a leading Japanese integrator, to provide application maintenance outsourcing services jointly to Unisys' customers. Nihon Unisys is a part of Unisys Group, a global information technology solutions and services company.
During the quarter ended 31 December 2002, the company acquired the prestigious Software Engineering Institute - Capability Maturity Model Level 5 certification for quality of software processes. Level 5 is the highest level. The company was also awarded the BS7799 Security Compliance Certification that assesses security of a wide range of information systems and processes.
Recently, the company acquired eJiva ( including a Toronto-based development centre), effective 1 January 2003, and Aqua Regia, effective 1 April 2003, to provide critical mass, enhance client profile, expand depth and range of services and strengthen sales and marketing, increasing Mascot's potential to compete for large business engagements.
Mascot Systems focusses on application maintenance outsourcing, e-business, business intelligence, application re-engineering, custom solutions and embedded systems. On the domains, Mascot focuses on the finance and banking, retail and distribution, manufacturing, telecommunications and service industries.
For the third quarter ended 31 December 2002 results, the software company posted a 36.53% fall in net profit to Rs 6.67 crore on operating revenues of Rs 97.71 crore. The company has also accounted for a one-time writeoff of Rs 3.11 crore. If the write-off amount is excluded, bottom line sinks further (66% to Rs 3.56 crore).
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