iGate net up 12-fold

iGate Global Solutions has reported 12-fold increase in net profit at Rs 15.95 crore for the third quarter ended December 31, as against Rs 1.3 crore during the corresponding period last year.

The company, which earns 26 per cent of its revenue from GE, reported 27.6 per cent y-o-y rise in its topline at Rs 210 crore. On a sequential basis, its net profit surged 57.3 per cent, while topline moved up by 4 per cent.

CEO Phaneesh Murthy, who joined from Infosys and has been turning around the company for the past two years, said iGate would continue to register good growth.

Claiming that there was enough space for a full-service, mid-tier IT services provider, he said the domestic outsourcing story would strengthen further and was expected to double over the next three-four years from the current $30 billion levels.

"We do not believe in the theory that a tier-2 service provider should develop a niche. We certainly believe there is enough space for others in the full-services space besides the four top players," Murthy said.

"We are moving ahead to achieve 15 per cent EBIDTA margin by the next quarter," he added. The operating margin is currently a little over 12 per cent.

Meanwhile, as expected by the markets, iGate said there was a negative impact of 3.6 per cent from the rupee appreciation during the third quarter.

"Our hedging strategy helped negate any adverse impact of this on margins," said N Ramachandran, CFO, iGate. Murthy acknowledged that adding only a small number of clients on a quarterly basis was an area of concern for the company and this should be beefed up. For the third quarter, iGate added five new clients, taking the total to over 110.

The number of million-dollar clients increased to 29 from 26 in the last quarter and the growth was driven primarily by top-five and top-ten clients, according to the company management.

On how the domestic software industry will evolve, he said innovation outsourcing would increasingly take the centrestage.

"As vendors increasingly handle operations and technology together, customers will look for partners, who can deliver well in both areas. Increasingly, sourcing strategies around business or product lines, rather than functions, will gain momentum," Murthy asserted.

A shift is also being witnessed in the revenue model. It is moving towards software as a service via pay-by-transaction. So "variations in cost will be the key", Murthy said.

iGate expects 2 per cent increase in its billing rates and is planning a 13-15 per cent wage hike for its 6,000 employees by April 2007.

Sintex Q3 PAT up 27%
Plastic and textile manufacturer Sintex Industries today posted 26.9 per cent rise in its net profit for the third quarter ended December 31 and said it was looking for inorganic opportunities for growth.

Net profit for Q3 FY07 stood at Rs 25.9 crore, against Rs 20.4 crore in the corresponding quarter a year ago quarter. Net sales of the company rose 35 per cent at Rs 284.6 crore from Rs 210.3 crore for the period under review, Sintex said in a statement.

"Sintex has delivered strong growth on the back of healthy demand especially in the custom moulded, pre-fabricated structures, collection and RMG segment," it said.  

BASF net down 24%

BASF India has posted 24 per cent dip in net profit at Rs 8.83 crore for the quarter ended December 31 as against Rs 11.74 crore in the previous year. It has recorded a total income of Rs 183.41 crore for the latest quarter, which is 1 per cent increase over Rs 181.59 crore posted at the end of December quarter in 2005, BASF said in a statement to the BSE.  (PTI)