IGate beats Wall St estimates, Q4 net jumps 71%
NASDAQ-listed iGATE beat Wall Street expectations by reporting a 71% jump in fourth quarter net income to $14.7 million and a 55% rise in revenue to $81 million.
By ET Bureau |
BANGALORE: NASDAQ-listed iGATE beat Wall Street expectations by reporting a 71% jump in fourth quarter net income to $14.7 million and a 55% rise in revenue to $81 million.
The firm, which bought Patni Computer Systems in one of India's largest IT transactions earlier this month, posted a 45% rise in 2010 revenue to $280.6 million and a 81% surge in net income to $51.8 million.
"We believe we are something of an outlier when it comes to growth compared to other mid-tier players and even the large players to some extent. We were able to achieve this strong growth because of our differentiated offering i.e. our iTOPS consulting and also because existing accounts have been strong growth drivers," iGate chief executive Phaneesh Murthy said.
IGate shares were trading down 0.89% at $16.11 in early US trade. The shares have fallen 35.11% since the 2010 peak of $24.83 on November 29.
Murthy said that iGATE's performance was driven by a differentiated business model and higher revenue from existing customers. "When your margins grow higher than revenue and your revenue grows higher than employee additions, you have achieved non-linearity ," he added.
IGate's growth was affected on a sequential basis after it paid out around $3.2 million as legal and banker fees for the Patni acquisition.
Many of India's biggest IT companies are far bigger than the iGate-Patni combine and Murthy will have his work cut out to win customers' support. In the next few years, he wants iGate to be No. 1 in capabilities in two verticals and a serious contender in three others. "I am not a fan of only scale, differentiated model plus scale is what we want," he added.accidentally
The firm, which bought Patni Computer Systems in one of India's largest IT transactions earlier this month, posted a 45% rise in 2010 revenue to $280.6 million and a 81% surge in net income to $51.8 million.
"We believe we are something of an outlier when it comes to growth compared to other mid-tier players and even the large players to some extent. We were able to achieve this strong growth because of our differentiated offering i.e. our iTOPS consulting and also because existing accounts have been strong growth drivers," iGate chief executive Phaneesh Murthy said.
IGate shares were trading down 0.89% at $16.11 in early US trade. The shares have fallen 35.11% since the 2010 peak of $24.83 on November 29.
Murthy said that iGATE's performance was driven by a differentiated business model and higher revenue from existing customers. "When your margins grow higher than revenue and your revenue grows higher than employee additions, you have achieved non-linearity ," he added.
IGate's growth was affected on a sequential basis after it paid out around $3.2 million as legal and banker fees for the Patni acquisition.
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The acquisition has put iGATE in the billion dollar league in revenue and the company said it will now have a better chance of winning larger deals with its differentiated offering and the scale that it derives from this acquisition. "This will give us a seat at the big table. It took us seven years of preparatory work to get a seat at the table," he added. Many of India's biggest IT companies are far bigger than the iGate-Patni combine and Murthy will have his work cut out to win customers' support. In the next few years, he wants iGate to be No. 1 in capabilities in two verticals and a serious contender in three others. "I am not a fan of only scale, differentiated model plus scale is what we want," he added.accidentally
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