iGATE Q2 net income up 84% to $11 mn

IT firm iGATE today said its net income jumped by 83.6 per cent to $11.2 million for the quarter ended June 30, 2010, on the back of recovering demand in the US markets.

The company, which receives 80 per cent of its revenues from the North American markets, had registered a net income of $6.1 million in the second quarter last year.

"The demand is now returning in the US market and we are pleased with the strong growth seen in this quarter. Nine out of our top 10 clients have seen growth and that gives us the confidence that the market is recovering," iGATE chief Executive Officer Phaneesh Murthy told PTI.

For the second quarter, the company posted a net revenue of $66.8 million, up from $46.8 million recorded in the corresponding quarter last year.

Asked about the impact of the Eurozone crisis, Murthy said: "Since just about 10 per cent of our revenues come from the European region, we have not seen such a major impact."

"But Europe is a concern and I think it will still be about a year or so before the region will be able to recover," he added.

Talking about challenges, iGATE Chief Financial Officer Sujit Sircar said: "While we had a good quarter and are encouraged by the strong earnings and cash flow, salary increase and substantial hiring has caused a short term pressure on margins."

As of June 30, 2010, the company's cash and cash equivalents and short-term investments increased to $104.4 million from $96.8 million.

iGATE, which competes with the likes of Cognizant and Genpact, added four new customers during the quarter.

The company added 801 employees during the quarter, taking the total headcount to 8,158 employees as of June 30.

iGATE has seven development centers in countries like Australia, India,

Japan, Malaysia and Mexico and provide services in banking, insurance, manufacturing, retail, healthcare, Media and entertainment.