Infotech Enterprises sees better Q3 on rising orders

Wed, 14 Oct 2009 13:47:48 GMT

By Bharghavi Nagaraju

MUMBAI - Software services firm Infotech Enterprises may see low single-digit revenue growth in the December quarter over the preceding quarter on rising orders in an improving economy, an official said on Wednesday.

Hyderabad-based Infotech is amongst two companies shortlisted for two deals worth over $50 million that are likely to be closed this quarter, Chairman and Managing Director BVR Mohan Reddy told Reuters over the telephone.

The revenue from these contracts is expected to start flowing in the last quarter ending March 2010, he added.

"The worst is behind us, because we have started seeing a large number of RFPs (request for proposals) coming out," Reddy said referring to the bids for various IT services contracts.

Reddy was speaking after the company posted a net profit of 353.3 million rupees for the second quarter ended September 30, almost unchanged from a year earlier. Revenue for the quarter rose 7.2 percent to 2.37 billion rupees.

"The quarter was good but the future looks more bright," he said. "There will be some growth, maybe low single-digit growth could possibly be there for the third quarter (Q3), whereas Q3 to Q4, there will be much larger growth."

Infotech has not seen any major pricing pressure from its clients in the September quarter, Reddy said adding it added 11 clients in the period.

Indian IT firms were hit in the global economic downturn as their core financial clients slammed the brakes on technology spending and demanded sharp price cuts.

Infotech continues to look for acquisitions and is likely to announce a deal in a couple of weeks, Reddy said declining to give further details. The company will use its cash of 3.6 billion rupees to fund buys, he added.

Infotech provides engineering design, information technology services and geospatial services to the aerospace, automotive, telecom, utilities and government sectors in Europe and North America.

Last week, IT bellwether Infosys Technologies Ltd posted a market topping 7.5 percent rise in quarterly net profit and raised its forecast for revenue and profit in dollar terms for the full year to March 2010.

Infotech shares ended 4.3 percent lower at 244.75 rupees in a firm Mumbai market.

(Editing by Sunil Nair)



(Reuters)

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