3i Infotech group net grows 70% to Rs 28 cr

Corporate Scorecard

Higher earnings from its products business and an increase in the order book position have helped 3i Infotech post a 69.8 per cent rise in net profit to Rs 27.9 crore on a consolidated basis for the quarter ended December 31, 2006, as against the last year's corresponding quarter net profit of Rs 16.45 crore.

The company's consolidated total income too grew by 53.22 per cent to Rs 171.64 crore compared with Rs 111.99 crore during the period under consideration.

The company's sequential (q-o-q) revenues from operations grew by 18.3 per cent, while its q-o-q net profit went up 20.6 per cent over the last quarter's figure.

Its operating margin increased from 22.5 per cent in the December 2005 quarter to 27.4 per cent in the December 2006 quarter.

In the previous quarter, the company acquired Stex Software Technologies (specialising in workflow and document imaging software), Rhyme Systems (a software products company in the BFSI segment in the UK) and also acquired a stake in e-Enable Technologies.

The acquisitions resulted in a 9 per cent growth for the company. Its earnings per share (EPS before exceptional items) stood at Rs 4.84 for the December 2006 quarter.

3i Infotech's products business contributes 52 per cent to the total revenues. The remaining 48 per cent comes from its services business. Its SG&A expenses have risen by 42.48 per cent year-on-year.

"3i Infotech has a two-pronged growth strategy. While we continue to aggressively grow our existing line of products organically, we are also looking to fill gaps in our offerings through the acquisitions. This has allowed us to build a formidable line of end-to-end, integrated product and solution offerings. Our results are therefore a reflection of our strategy and growth trajectory which we have envisaged for ourselves," said V Srinivasan, managing director and CEO of the company.

Meanwhile, ICICI, a major stakeholder in 3i Infotech, is reportedly planning to reduce its stake in the company below 30 per cent. It is scouting for financial investors in this regard.

The market buzz was that Oracle was in the race. However, Srinivasan dismissed the rumours, but admitted that ICICI would be reducing its stake some time.