Infotech Enterprises Q4 profit slides 23% in March quarter

Infotech Enterprises, an engineering-focussed IT solutions provider, today said net profit for the March quarter fell by 23% to Rs 54 crore mainly due to drop in other income.

The company's net profit for the quarter in the previous fiscal stood at Rs 70 crore.

Net income from operations for the January-March 2013 quarter grew by 11% to Rs 464 crore against Rs 417 crore during the corresponding period last fiscal.

There was a considerable drop in the other income which stood at Rs 9.5 crore as against Rs 35.6 crore in the fourth quarter last fiscal, Infotech Enterprises, President Global Human Resources and Corporate Affairs, B Ashok Reddy, said.

He said the company is currently signed 'letter of Intent' to acquire two companies.

Reddy, however, said the company cannot comment whether these deals would materialise in this fiscal.

"We will go for due diligence for these companies. That does not mean that any of them can be converted into acquisition," Reddy said at a press conference.

He said Infotech plans to recruit 2,500 employees (gross) in the current fiscal assuming 15% attrition rate.

"We see margins are stable in this fiscal," he said.

Revenues for the full year ( 2012-13) stood at Rs 1,873 crore up 21% over 2011-12  and profit after tax recorded at Rs 231 crore up 43% year-on-year.

Ajay Aggarwal, Chief Financial Officer, Infotech said free cash generated by business doubled in one year to Rs 112 crore (from Rs 51 crore last year).

As on March 31, cash balance, including liquid investments, was at Rs 559 crore.

Agarwal said the company is expected to gain 4% on taxes as business is moving into SEZs located various locations across the country.

BV R Mohan Reddy Chairman and Managing Director said currently around 1,400 employees are working in USA and the new proposed Visa Bill in that country will not impact the company.

Mohan Reddy said Infotech opened Silicon Valley office in Santa Clara, California (USA), Larger facility to accommodate anticipated growth and new SEZ facility was inaugurated at Kakinada, Andhra Pradesh.

The new development centre is Infotech's seventh in India and currently employs 850 people.

"Reported PAT of Rs 54.2 crore was above our Rs 48.7 crore estimate led by lower taxes and higher other income," said ICICIdirect.Com Research in a note.

Shares of Infotech, however, fell by 2.85% on the BSE to end at Rs 163.75 apiece.