The Hindu Business Line : i-flex net slumps to Rs 7.9 cr

A REDUCED licence fee revenue composition and increased infrastructure and staff strength have led to a drastic attenuation of net profit for i-flex Solutions Ltd for the quarter ended June 30, 2005.

The company has reported a net profit of Rs 7.9 crore compared with Rs 37.6 crore for the quarter ended June 30, 2004.

"Our profits in the quarter are low," said Mr Rajesh Hukku, Chairman and Managing Director, i-flex. "However, this is reflective of our product business model where the revenue accruals can vary substantially from quarter to quarter."

Overall, this quarter, licence fee composition of 22 per cent as against 45 per cent for the full year 2004-2005 has impacted the bottomline, said Mr Deepak Ghaisas, CEO, India operations and CFO. Revenues rose 16.9 per cent to Rs 211.2 crore, up from Rs 180.6 crore.

Cost of revenues rose to Rs 144.2 crore, up from Rs 99.4 crore, expenditure rising under all heads - selling and marketing, general and administrative, and depreciation and amortisation.

Mr Ghaisas said the company's efforts at managing costs have yielded results. While infrastructure and staff strength have grown by 100 per cent and 63 per cent, respectively, overall expenses increased only by 45 per cent, he noted.

Income from operations fell to Rs 8.7 crore, down from Rs 42.5 crore.

The consolidated net profit (under Indian GAAP) fell to Rs 15 crore for the quarter, from Rs 41 crore during the year-ago quarter.

The consolidated topline growth was 22 per cent with revenues at Rs 274 crore (Rs 224 crore).

"We continue to enjoy accelerated penetration into large and strategic accounts, evidenced by the strong new signings of customer relationships in this quarter," said Mr Hukku. "i-flex continues to enjoy a healthy sales pipeline as we continue to meet the growing requirements of the global financial services industry through sustained investments."

The i-flex stock closed down today at Rs 852.25 on the BSE over the previous day's close of Rs 899.20.

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