The New Jersey headquartered outsourcing company IGATE reported a 90 per cent drop in net profit to $3.1 million for the second quarter (April-June 2014) because of a one-time charge related to debt settlement.

The company posted revenues of $311.7 million, a 10 per cent increase YoY compared and a sequential increase of 3.2 per cent for the same period.

The fall in profit was because of a one-time charge of $51.8 million arising from the extinguishment of debt to the tune of $685 million during the quarter. The company still has a net debt burden of $475 million that needs to be serviced.

IGATE added nine new clients, including five Global 2000 companies during Q2, one of which, CNA Financial, is their largest multi-year deal to date.

Stating that the company’s deal pipeline is very healthy, Ashok Vemuri, President and CEO, IGATE, said: “Two large multi-year deal decisions are awaited at the end of this quarter and we are positively placed to win them.”

He said the impact of the reorganisation of the business units effective January this year, based on industry verticals, will play out over the next few quarters. IGATE gave out wage hikes of 9 per cent to offshore employees and 3 per cent to onsite employees this quarter.

The second quarter saw the company adding a record number of employees at 1,907 net, with a record 570 joining up in one single day, taking its total headcount to 32,742 as of June 30. Attrition during the quarter saw a marginal dip to 15.4 per cent, unlike Infosys which saw an all-time high of 19.5 per cent attrition in the same quarter.

“We have moved from the just-in-time hiring model to hiring-for-growth model because that is the appropriate way to hire. We will hire more freshers over the next few quarters,” said Vemuri. At present, the company’s fresher to lateral hiring ratio is 40:60 and employee utilisation is at 74 per cent.

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