Aztecsoft Q1 net slips on rupee impact

NEW DELHI: Software services firm Aztecsoft posted a 38.51 per cent decline in net profit at Rs 5.70 crore for the first quarter ended June 30, as against Rs 9.27 crore for the same period last year due to sharp rupee appreciation.

"Rupee appreciation was the fundamental reason. However, our tight control on operation and hedging has enabled us to reduce the impact," Aztecsoft Chief Financial Officer V Sunderajan said.

Consolidated revenues for the quarter dropped marginally at Rs 59.07 crore as against Rs 59.48 crore in the year-ago period.

"The revenues were impacted by 6.8 per cent on account of unanticipated exchange rate variation. However, tight control over operations, better utilisation and favourable hedging ensured that the bottomline impact was limited to 1.2 per cent of revenues," the company said.

The Indian currency rose by over six per cent against the dollar in the first quarter of the current fiscal, impacting revenues of software companies.

Aztecsoft, however, is optimistic over its performance in the next quarter. "We have reasonably good hedges. Besides acquisition of new clients and major contract renewals will help us to accelerate our growth," Sunderajan said.

For the second quarter of this fiscal, the company expects a quarter-on-quarter growth of 5-6 per cent in rupee terms, estimating an exchange rate of Rs 40.50 per dollar.

The company has added four new strategic clients. The total active client count stood at 87 at the end of June quarter.

Aztechsoft plans to ramp up its headcount to 2,600-2,700 in the current fiscal, company President Samir Bodas said adding that around 400-500 people would be joining the company's payrole in phase-wise manner.