iGate Q4 Net up 7.5%; to take upto $325 mn debt to pay loan

Outsourcing firm iGate today reported 7.5 per cent rise in net profit at USD 33.1 million for the quarter ended December 31, 2013, helped by large deals in the North America and Europe.
The US-based company also announced that it expects to take an additional loan of USD 300-325 million by April this year to fund a debt of USD 770 million, which is due in May this year.
The NASDAQ-listed firm had posted a net profit of USD 30.8 million in the year-ago period, it said in a release.
Net revenues rose by 10.2 per cent at USD 299.3 million in October-December, 2013, against USD 271.6 in the same quarter of 2012.

IGate follows January-December as fiscal year. The figures are on GAAP basis.
Commenting on the performance, iGate President and CEO Ashok Vemuri said in a earnings conference call: "I am happy with the firm's performance in 2013 and particularly pleased with the nature of large deals signed during the year."

On a quarter-on-quarter basis, iGate's net income rose by 3.76 per cent and revenues were up by 2 per cent.
Vemuri further said: "We have successfully finished regrouping the organisation into vertical-based business units that bring in more industry knowledge and solutions, move us closer to the customer, and increase the depth and accountability to the business."

On the vertical alignment in the firm, Vemuri said this restructuring will help the firm better leverage the enormous talent, institutionalise the deliver engine, increase focus of the sales team, identify client issues faster to drive growth.
"We believe due to our size and scale, we needed to restructure the organisation into focused units with deeper domain capabilities that streamline our go-to-market themes...," he added.
On the company's debt issue, iGate CFO Sujit Sircar said: "We entered into a USD 360 million credit agreement in November 2013 and expect to take in approximately USD 300-325 million additional debt towards the end of April in order to re-finance USD 770 million which comes due in mid-May 2014."

IGate added 9 clients during the fourth quarter with four in North America and 5 from Europe. Six clients were from the manufacturing sector and one each from insurance, healthcare & lifesciences and business and financial services, Vemuri said.
On clients, Sircar said total active clients stood at 302 and as part of re-alignment iGate are winding up its smaller accounts which are not strategic ti the firm The company closed 17 such accounts in the October-December quarter.
For the entire 2013 fiscal, iGate reported 35.5 per cent rise in net income at USD 129.8 million against USD 95.8 million in 2012.

Net revenues rose by 7.5 per cent to USD 1.15 billion as compared to USD 1.07 billion during the same period.
As of December 31, 2013, iGate had 29,733 employees with a net addition of 1,450.