Aztecsoft net drops on tardy client orders

CORPORATE SCORECARD

Following the transfer of Dendrite, the offshore delivery centre, and sluggish growth in the top accounts, Aztecsoft has posted a 36 per cent dip in its profit for the fourth quarter ended March 31, 2007.

The company's consolidated profit after tax (PAT) for the quarter dropped by 36 per cent to Rs 6.75 crore compared with the corresponding quarter of the previous year. The consolidated revenue of the company during the quarter grew by 13 per cent to Rs 62.25 crore.

The markets reacted sharply to this news culling the stock by close to 8.1 per cent, in a depressed market on Friday. Aztecsoft's stocks closed at Rs 111.25 in the BSE on Friday compared with the previous day's close of Rs 121.05.

During the quarter, the percentage of revenue from the top 10 clients came down to 58 per cent from 70 per cent reported in the corresponding quarter last year.

V Chandrasekaran, managing director, Aztecsoft, said, "Revenue growth and profits in this quarter were impacted by a sluggish growth in the top accounts. We anticipate this trend to continue in Q1 of FY08. However, we remain confident of the overall business momentum and our recent clients will help us to grow in the subsequent quarters."

Sequentially, the company's net declined by 39 per cent and revenue by 13 per cent.

For 2006-07, Aztecsoft's consolidated PAT grew by 5 per cent to Rs 38.62 crore, while revenue moved up by 32 per cent to Rs 260.99 crore.

The company said it had re-aligned the process, services, technology offerings and management team during the quarter to deliver superior value-added services to the customers.

Aztecsoft's offshore focus continued in the fourth quarter, with the segment contributing 81 per cent and onsite revenue contributing 19 per cent to the company's consolidated revenues.

During this quarter, Aztecsoft added six new clients with a mix of mature players and emerging clients. The number of active clients as on March 31, 2007 stood at 90.

Following the transfer of Dendrite, the total headcount of the company as on March 31, 2007, stood at 2,194 compared with 2,682 reported as on December 31, 2006.