Infotech Enterprises spurts after robust Q2 results

Infotech Enterprises jumped 7.50% to Rs 242.25 at 15:23 IST on BSE after consolidated net profit rose 33.5% to Rs 72.50 crore on 13.5% increase in revenue to Rs 549.28 crore in Q2 September 2013 over Q1 June 2013.

The result was announced during market hours today, 17 October 2013.

Meanwhile, the BSE Sensex was down 143.86 points, or 0.70%, to 20,403.76.

On BSE, 86,000 shares were traded in the counter compared with average volume of 5,819 shares in the past two weeks.

The stock hit a high of Rs 245.80 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 224 so far during the day. The stock hit a 52-week low of Rs 157 on 16 May 2013.

On a consolidated basis, operating profit jumped 35.6% to Rs 108.78 crore in Q2 September 2013 over Q1 June 2013. Operating margin was reported at 19.8% in Q2 September 2013 compared with 16.6% in Q1 June 2013.

Commenting on the results, Mr. BVR Mohan Reddy, Chairman and Managing Director, said: "In-spite of uncertainties in the global economies and challenges of ramp-downs among few of our large customers, we had a very stable business for past four quarters. The current quarter performance and the strong existing order pipeline make us feel confident that we are back on accelerated growth path. While we will grow our business, we are equally confident of stable margins and profitability. We are very confident of a stronger performance in H2 of this Financial Year."

Mr. Ajay Aggarwal, Chief Financial Officer, said: "This quarter we posted strong QoQ improvement in our operating margin and net margin at +323 bps QoQ and +198 bps QoQ respectively. Margin expansion is driven by foreign exchange benefit and operational efficiencies which were partially offsetted by our continued investments in branding. sales and new offices. At the end of H1, we are confident of continued improvement in our key financial performance parameters including higher Free Cash Flow generation, lower DSO, optimized capital expenditure and reduced Tax Rate, over last year."

Infotech Enterprises provides engineering solutions, including product development and life-cycle support, process, network and content engineering to major organizations worldwide.

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