The Hindu Business Line : Engineering services drive up Infotech Enterprises net in Q4

Hyderabad, April 21 With revenues of Rs 187.4 crore (Rs 151.2 crore) and net profit of Rs 25.9 crore (Rs 21.45 crore) for the last quarter of fiscal 2007-08, the Hyderabad-based Infotech Enterprises Ltd has shown a growth of 23.9 per cent and 4.1 per cent, respectively, over the comparative quarter of the previous year.

While a robust performance of its core engineering services helped the company grow, its operating margins in the background of a softening dollar stood at 18.2 per cent (against the projected 18-20 per cent), said Mr B.V.R. Mohan Reddy, Chairman and Managing Director.

For the entire year, Infotech maintained a healthy 40 per cent growth (in dollar terms) for the third successive year with revenues of $167.5 million or Rs 674.13 crore up from $119 million or Rs 542.54 crore. Engineering services logging over $100 million being the high mark, Mr Reddy told newspersons.

The company’s EPS (earning per share), both basic and diluted showed a fall from 5.08 (5.37) and 5.02 (5.34) during the comparative quarters. Mr Reddy explained that the increase of equity base by 15 per cent through preferential allotment to General Atlantic and the profits not being in tune with the revenue growth due to the margin pressure of two per cent were the main causes.

The company’s board, which took on record the un-audited financial results, also declared a dividend of 24 per cent. For every share of Rs 5, a pay out of Rs 1.20.

Emphasising that the company did not see any slow down in the markets it operated, Mr Reddy said: “We are making a modest growth forecast of excess of 30 per cent in dollar terms for current fiscal and operating margins of 18-20 per cent.” On pressures in billing and salary, he anticipated a rise of 2 per cent and 10 per cent, respectively.

It has a cash in bank of $79 million, which it raised during the first quarter of fiscal 2007. The funds would be used for acquisitions, which it is actively pursuing in the US, Europe and also India. The size of the target companies in the engineering and geospatial segments would be between $20 million and $100 million, Mr Reddy said.

On expansion, he said about Rs 160 crore would be invested in the campuses at Hyderabad, Kakinada and Visakhapatnam.

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