iGate net income rises nearly 2-fold to $28 mn in Jul-Sept

US-based IT company iGate today said its net income jumped 97.9% to $28.3 million (about Rs 150 crore) in the July-September quarter this year.

This is against a net income of $14.3 million (about Rs 75 crore) in the quarter ended September 30, 2011, iGate said in a statement.

Revenues for the reported quarter increased by two% to $271.1 million from $265.7 million in the same quarter of 2011.

"It has been a mixed quarter...(There was a) long lead time and contract signing was delayed because of delay in decisions (making) on the client front," iGate CEO Phaneesh Murthy told reporters on a conference call.

There was a huge bump up in margins and gross margins for the quarter were up from 37% to 40%, he added.

"EBIDTA was up from 23% to 25%, well in line with our guidance to the market. EPS went up 284% from seven cents to 27 cents," Murthy said.

The cash flow generated during the quarter was $37 million and the total cash reserve stood close to $550 million.

"We have continued to maintain high earnings growth. However, volatility in the foreign exchange market remains to be a cause of concern," iGate CFO Sujit Sircar said.

On the outlook on the environment, Murthy said, "The deal pipeline is very strong. It is as strong as it can ever be."

IGate added 150 employees in the July-September quarter, taking its total headcount to 27,543 employees. It added nine new customers including five Fortune 1000 companies during the quarter.

"On the revenue outlook, it has not been a happy quarter with extended lead-time in client decision making and contract renewals slowing our revenue growth. From a margin perspective, however, I am extremely pleased with our profitability as we continue to sustain strong gross margins and adjusted EBITDA," Murthy said.

IGate has opened a new US facility in Sterling, Virginia in August this year and expects to create over 250 jobs in the region over the next couple of years.

"With the opening of our new facility in Virginia and recent hiring in our facilities in Pensacola and El Paso, we have been steadily increasing local hiring in the US," Murthy said.

IGate, which had acquired Indian IT company Patni Computer Systems last year, said its "corporate restructuring is proceeding according to schedule as it moves towards the vision of 'one company'."

India-based larger rival Infosys today reported 24% jump in profit in rupee terms for the quarter ended September but has reduced its full-year earnings outlook on the back on uncertain economic conditions.