iGate posts flat profit at $38 million, sees sequential decline in revenue

BENGALURU: A week after being bought over by Paris-based Capgemini, Nasdaq-listed iGate on Tuesday posted tepid first quarter numbers with profits remaining flat and revenues declining on a sequential basis, hurt mainly by currency fluctuations that have also impacted larger India-based rivals such as Tata Consultancy Services and Infosys.

For the quarter to March, iGate posted a net profit of $38 million compared with $38 million during the December quarter and up from $31.6 million a year ago.

Revenue fell 2.9% on a sequential basis to $322 million. Gross margins were marginally up on a sequential basis to 35.1%, but declined on a year-on-year basis from 37.5% last year.

"Volatility in the foreign exchange market remains a cause of concern, particularly the appreciation of the US dollar against other currencies, which is affecting our top line performance," iGate CFO Sujit Sircar said in a statement.

iGate, which counts General Electric and Royal Bank of Canada among its top clients, said it added 15 new customers during the quarter.

Earlier this week, Capgemini bought iGate for about $4.04 billion, marking one of the largest acquisitions ever in the technology services sector. The deal helps Capgemini increase its footprint in North America, the world’s largest technology market, at a time when it is facing stiff competition from global and Indian peers such as Accenture, TCS and Infosys.

Bridgewater, New Jersey-based iGate’s shares closed marginally down at $47.68 on Nasdaq on Monday.