Financial Daily from THE HINDU group of publications
Wednesday, Apr 12, 2006
Financial Daily from THE HINDU group of publications Wednesday, Apr 12, 2006 |
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Financial Performance Corporate Results - Software Info-Tech - Financial Performance iGATE's Q4 revenues rise 15%, net up at Rs 4.7 cr Our Bureau
MR PHANEESH MURTHY, CEO, iGATE Global Solutions, and Mr Mohan Sekhar, Chief Delivery Officer (left), at a press conference in Bangalore on Tuesday. — G.R.N. Somashekar
Bangalore , April 11 iGATE Global Solutions Ltd has reported a net profit of Rs 5.5 crore on revenues of Rs 636.5 crore for the year ended March 31, 2006 compared with a net of Rs 21.2 crore on revenues of Rs 580 crore in the previous year. Net profit was lower as the company made a Rs 11.1-crore provision for diminution in long-term investments, Mr Phaneesh Murthy, CEO, iGATE, told a press conference. However, iGATE saw its operating profits increase to Rs 61.4 crore (Rs 32.5 crore last year). "Our goal is to improve the operating margins to 15 per cent by end of FY-07 from 10 per cent in FY06," Mr Murthy said. The company expects to achieve this through various means such as increased utilisation, manage selling, general and administrative expenses more efficiently while having an employee mix with more freshers.
Q4 revenues
Revenues for the quarter ended March 31, 2006 were Rs 167.37 crore, up 15 per cent over the same quarter last year. Net profit was Rs 4.7 crore compared with Rs 2.2 crore in the same period of last year. The company added 8 new clients during the fourth quarter. iGATE effected a selective salary hike in January, which impacted the fourth quarter margins by 1.12 per cent, Mr Murthy said. Further, the company expects to hike salaries of its offshore employees during the April quarter, which is expected to impact the margins of the first quarter of 2006-07. The iGATE CFO, Mr N. Ramachandran, said the company took a hit of 1.9 per cent on its topline due to the currency fluctuation during the fourth quarter, adding that about 93 per cent of the cash flows were covered against currency volatility.
Investment plans
"We expect to spend Rs 25 crore as capital expenditure this year," Mr Ramachandran said. The company added 1,200 employees during fiscal 2006 taking the total employee headcount to 5,152 at the end of the year. iGATE plans to add between 1,800 and 2,000 during fiscal 2007, Mr Murthy said. Commenting on the pricing regime, Mr Murthy said it was reasonably comfortable with business looking stronger and better. iGATE, Mr Murthy said, has proposed to move the existing operations in China from Wuxi to Dalian, the outsourcing hub of China, to leverage upon the technology talent pool to service its Japanese customers.
Revenues from GE down
Revenues from GE, the key customer of iGATE came down to 36 per cent during fiscal 2006 compared with 40 per cent in fiscal 2005. This was primarily due to the acquisition of GE's division with which iGATE was working, Mr Murthy said..
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