AztecSoft Q1 net falls 38% despite stable top line

The appreciating rupee has hit the margins of software engineering services provider Aztecsoft in the first quarter ended June (Q1FY08), with the company's net profit dipping 38.51% at Rs 5.7 crore when compared to the corresponding quarter last fiscal, despite maintaining a consistent top line year-on-year.

The top line during Q1FY08 was Rs 59.07 crore, down a bit from Rs 59.48 crore in Q1FY07. The company has admitted that its revenue was impacted 6.8% on account of exchange rate variation.

In spite of undertaking measures like control over operations, better utilisation and hedging to minimise the impact of rupee appreciation, the operating profit was down 60% over the corresponding quarter last year. The operating profit stood at Rs 3.91 crore.

On a sequential basis too, the net profit is down by 15.5%. While the top line witnessed a dip of 5.1%, the operating profit, too, witnessed a negative growth of 28.12%.

Aztesoft chairman K B Chandrashekar said, "Addition of new clients and renewal of major contracts during the quarter will enable the company to accelerate growth."

During the quarter under review, the company added four new clients and renewed the contracts of two of its top five clients. The total number of active clients stands at 87, he added.