iGate aims at 40% gross margin by '07

iGate Global Solutions, an integrated technology and operations firm with a global services delivery model, will target 40% gross margin and 15% EBDITA by March 2007, a top official said today.

"This year we expect the overall profitability to be better. We are currently at 30% gross margin and 4-4.5% EBDITA (earnings before interest, depreciation, taxes and amortisation) and our goal is to be at 40% gross margin and 15% EBDITA by March 2007," Phaneesh Murthy, chief executive officer of iGate, said today.

iGate reported a revenue of Rs 580 crore for 2004-05, compared to Rs 570 crore in the previous year.

"While we are profitable, the two factors - rupee appreciation and 13% salary increase announced for our employees for 2005-06 - will have 4-5% impact on the margins," he said.

Murthy said that clients were less sensitive to pricing, since they were getting the good quality of work. "About 60-70% of our revenue flows from fixed price projects," he added.

North america accounts for about 70% of iGate's revenue and the remaining comes from Europe and Asia Pacific. "We are focussing strongly on Japan," he said.

On manpower addition, he said the company would add 800-1,000 people at its development centres this year. Freshers would account for about 30% of the intake.

Presently iGate employs more than 4,000 people, out of which 30% work outside India.