Syntel's Q1 net income dips 31% y-o-y

Revises upper end of CY 2015 guidance

Nasdaq listed IT services firm Syntel reported net profit of $40 million for the first quarter ending March 31, 2015, down 31 per cent from $58.1 million in the corresponding quarter last fiscal.

Revenue for the quarter at $220.6 million grew about 1 per cent from 219.5 million in the same quarter last year. Revenue declined six per cent on a sequential basis.

"While the first quarter is typically a seasonally weaker period for us, this Q1 got off to a slower start than usual as some of the projects we are engaged on were slow to ramp," said Syntel CEO and President Nitin Rakesh.

The company revised the guidance for 2015 revenue in the range of $985 million to $1,015 million. The company revised the upper end of guidance. It had guided for revenue of $985 million to $1,025 million towards the end of FY2014. The guidance is based on current visibility levels and an exchange rate assumption of 62 Indian rupees to the dollar.

The company's gross margin was 35.7 per cent in the first quarter, compared to 43.7 per cent in the prior-year period and 41.4 per cent in the fourth quarter of 2014. Selling, General and administrative (SG&A) expenses were 16 per cent of revenue in the first quarter, compared to 14.7 per cent in the prior-year period and 10.2 per cent in the previous quarter.

"We remain committed to distinguishing our service delivery with innovative IP and a customer focus that has fortified existing relationships while presenting multiple opportunities to build new ones in our chosen domains. This commitment has helped us assemble a long-term track record of strong execution, and we look forward to building on this in the future," said Rakesh.

During Q1, Syntel spent $4.4 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $867 million. The company ended the quarter with 24,534 employees globally.