The Hindu Business Line : iGATE Q3 net jumps 10-fold

, iGATE Global reported an over 10-fold rise in net profits for the third quarter , though a strong rupee removed some of the sheen from this performance.

iGate registered a net profit of Rs 15.95 crore, a growth of 1126 per cent over corresponding last quarter's net of Rs 1.3 crore. Revenues grew 27.6 per cent to Rs 210.73 crore (Rs 165.15 crore). Sequentially, the net profit grew 57.3 per cent while revenues registered a four per cent growth.

"We closed the third quarter with robust revenue growth. We are moving ahead to achieve the goal of 15 per cent operating margins by March 2007," said Mr Phaneesh Murthy, CEO, iGATE Global Solutions.

Tracking the results, the iGATE stock touched an intra-day high of Rs 412.5 on BSE before closing lower at Rs 394 on Wednesday. The stock has gained some 58 per cent in the past month.

Mr Murthy said he expects a five per cent quarter-on-quarter growth in revenue in the fourth quarter ending March 31, which should come by adding new clients at higher billing rates. Revenues from General Electric, the top client, accounted for 26 per cent of the total revenues.

Mr Murthy said he saw a slight bullish nature in the budgeting environment as the IT budgets could see a 2-3 per cent rise in 2007.

"Revenues in rupee terms were impacted by 3.6 per cent during the quarter due to the rupee appreciation against the dollar. A sound hedging strategy has negated the potential adverse impact on margins as we managed our net cash flows very well," said Mr N. Ramachandran, CFO, iGATE.

The rupee appreciated by 3.5-3.6 per cent against dollar during the quarter.

SG&A expenses as a percentage of revenue came down year-on-year to 18.5 per cent from 19.7 per cent in Q3FY06, Mr Ramachandran said. The average realised rates for third quarter were up by two per cent, he said. iGATE has an outstanding forward cover of $25-26 million. iGATE reported an earnings per share at Rs 5.09 per share for the quarter as compared to Rs 0.44 per share in Q3FY06.

iGATE added over 300 people added during the quarter and expects to add another 400-500 people in the last quarter. iGATE was concerned with the low numbers of new client additions during Q3, Mr Murthy said adding the company would ensure that the numbers will go up dramatically in the coming quarters. iGATE added five new clients during the quarter of which two were Fortune 1000 companies.

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iGATE Q3 net jumps 10-fold