Date:10/01/2008 URL: http://www.thehindubusinessline.com/2008/01/10/stories/2008011052540400.htm

Back iGATE net jumps 80.1% in Q3

Rupee-dollar parity has impacted revenue: CEO

Mr Phaneesh Murthy, CEO (file picture)

Our Bureau

Bangalore, Jan. 9 iGATE Global Solutions, the software services and operations company, today reported an 80.1 per cent rise in its net profit at Rs 29 crore for the quarter ended December 31.

Buoyed by Rs 3.4 crore from other income, iGATE made up for a modest drop in its operating revenue at Rs 209.3 crore (Rs 210.7 crore) to improve its net from Rs 16 crore during the third quarter of of FY 2007.

Interestingly, revenues rose 4.2 per cent sequentially from Rs 200.8 crore.

Commenting on performance, the CEO, Mr Phaneesh Murthy, told Business Line, “The rupee-dollar parity has impacted revenue (year-on-year). The sub-prime market continues to be weak and we don’t see much improvement in this in the near future.”

Delisting

The company is in the process of delisting its shares from the Indian stock exchanges. An open offer to this effect was recently completed at Rs 410 to a share.

Mr Murthy said that about 6 per cent of shareholding is still with the public shareholders, who have a six-month window to tender their shares. “We expect to get 100 per cent ownership in 1 to 2 months,” he said.

iGATE added three new customers during the quarter in the financial services space, of which one is a Fortune 1000 company.

Hedging

Effective hedging policy contributes to net income. The company has about $45 million hedged at Rs 41 to a dollar. It is learnt that the company typically covers about 80 per cent of its cash inflow, through hedging.

iGATE’s earnings per share grew to Rs 9.09 during the quarter ended December 2007 from Rs 5.09 in the same quarter last year.

Mr Murthy said that the company is on track to deliver growth in earnings comparable to the best in the industry. “In addition, visibility of revenues is getting better and we are looking at another good sequential quarter,” he said.

The company added 300 people in the last quarter and expects to add between 300 and 400 this quarter which would take the headcount to over 6,700.