Infotech Enterprises has posted a 7 per cent drop in net profit in the second quarter ended September 30 at Rs 33 crore even though revenues rose 24.4 per cent over the last year to stand at Rs 295 crore.
The city-based services and solutions provider for engineering and geographic information attributed the slump in the net to salary hike this year.
"There has been a 15 per cent salary hike for India-centric employees and around 5 per cent for oversees people. That has impacted the net to some extent," Infotech Chairman and Managing Director B V R Mohan Reddy told PTI today.
Commenting on the results, he said the verticals-utility, transportation and government (UTG) and engineering, manufacturing and industrial products (EMI) generated volume growth of 15.8 and 13 per cent respectively. Both geographies – North America and Europe - increased their revenue contribution during the quarter.
"Going forward, we have a strong order pipeline and are expanding further into our existing client relationships. We are also taking steps to improve pricing, utilisation and efficiency (levers for operating margin growth). Our investment in people has accelerated growth."
During the quarter, the company acquired Wellsco Inc, a US-based telecom engineering firm. Wellsco contributed Rs 8.5 crore to the revenues. Infotech scrip closed at Rs 174.75 on the BSE, down Rs 14.30 over previous close.
