iGATE Q2 profit spurts, revenue dips

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Bangalore, Oct 10: iGATE Global Solutions (iGS) today announced a marginally lower revenue of Rs 200.80 crore and a 127 per cent spurt in net profit at Rs 22.08 crore for the second quarter FY08.

Agreeing that revenue growth was of concern, Company CEO Phaneesh Murthy said the order book was good and iGATE won three new customers in the million plus dollar bracket during the period to take its customer base to 29.

Briefing newspersons at the company's sprawling new facility at Whitefield on the outskirts of the city, he said iGATE posted a strong growth in profitability with net profit zooming to Rs 22.80 crore for the quarter ended September 30.

''We closed the second quarter with a healthy order book giving us optimism for revenue growth. Improved productivity and efficiency coupled with our differentiated iTOPS model helped us grow margins strongly,'' he added.

Revenue for the second quarter was at Rs 200.8 crore, marginally lower compared to Rs 202.6 crore in the corresponding quarter previous year.

However, net profit surged to Rs 22.80 crore from Rs 10.1 crore in the corresponding period while the EPS grew to Rs 7.25 from Rs 3.26.

The gross profit grew 10.6 per cent from 59.4 crore to 65.7 crore, while operating profit increased to Rs 31.7 crore from Rs 20 crore.

Profit before tax stood at Rs 23.7 compared to Rs 9.2 crore in the previous period, he said.

iGATE appointed Former Infosian Hari Murthy to its board as the new head of sales and marketing. The off shore volume of the business grew to 78 per cent from 72 per cent during the previous period, while EBIDTA margins and growth tracking was as per the goals, he said. Mr Murthy said the company, which employed nearly 6,000 at present would hire 800 to 900 more engineers before March 2008 and expand by building a new facility measuring 3.5 lakh sq ft at a cost of Rs 110 to Rs 120 crore. It would add 3,500 more employees in the next few years.

He said iGATE Global Solutions, the subsidiary of Pennsylvania-based iGATE Corporation, would be delisted from the Bombay Stock Exchange as the returns on shares was better in NASDAQ and most of its clients were based in North America.

This move was to simplify the capital structure and eliminate the necessity of maintaining multiple listings and multi-jurisdictional filings, he added.

''The EGM is slated for November 13 and under applicable Indian laws iGATE and iGATE Inc would acquire 90 per cent of iGS's common stock.

''The two US-based companies currently own 81.1 per cent of iGS,'' he added.

UNI

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