Information Technology (IT) services firm iGate Corporation posted a 136 per cent jump in its net profit at $30 million for the quarter ended June 30, against the same quarter last year. The company's revenues rose six per cent year-on-year to $283.3 million and three per cent sequentially, on the back of new order wins and improvement in business environment.
The net profit includes $3 million derived from the cancellation of stock options issued to the company's former chief executive officer (CEO) Phaneesh Murthy.
In June this year, the Nasdaq-listed company had asked Murthy to leave after the company discovered he had concealed information about a relationship with a subordinate, going against the company policy. Sunil Wadhwani, co-founder and co-chairman, said on Wednesday search for a new CEO was on and the "aim is to have a new CEO by autumn".
In a statement, iGate's interim CEO Gerhard Watzinger said the company has booked orders worth $600 million, including three significant multi-year contracts, each valued at $100 million or greater. "The company is seeing more positive signs related to offshore IT services spending and stability in the overall business environment, with clients spending to their budgets," he said. The company's gross margins stood at 37.9 per cent. It lost $1.3 million due to forex losses. Watzinger added the company's growth has been broad-based during the last quarter.
For the next quarter, iGate is looking at a sequential growth of at least two per cent. "We are seeing much more willingness from clients to spend the money they had earlier budgeted for," he added during a call with analysts on Wednesday.
"I am happy with the margin growth seen in the quarter as we absorbed our annual wage hikes which were offset largely by operational efficiencies and to an extent the depreciation of the Indian rupee," said Sujit Sircar, chief financial officer of iGate.
Sircar said the tailwinds provided by the rupee fluctuation against the US dollar appear to be short-lived, with the operating costs going up in the medium to long term.
The company added 11 new customers during the quarter, of which, two were Fortune 1000 companies. The management said it plans to hire 500-600 net employees over the next few quarters.