Infotech Enterprises registers Y-o-Y Revenue growth of 40.0% at $ 77.5 million

Hyderabad: Infotech Enterprises Limited has registered a Y-o-Y Revenue growth of 40.0% at $ 77.5 million (Q-o-Q growth of 7.8%) for Q1 - FY 2011-2012. The company registered a a Y-o-Y Revenue growth of 37.1%, Q-o-Q growth of 6.4% at Rs 3,466.7 million.

Its Business momentum and environment continues to be in line with the expectations in – Aerospace, Heavy equipment, Rail, Hitech, Telecom and Content engineering.

Commenting on the results, Mr. BVR Mohan Reddy, Chairman and Managing Director, said, “We are pleased to deliver one more quarter of consistent results. Our Q1 results for FY 2011-12, indicate robust quarter on quarter revenue growth of 6.4% and year on year growth of 37.1%. In dollar terms, our revenues were at $ 77.5 million, a growth of 7.8% over sequential quarter and 40% over quarter 1 of last year.

Being the first quarter of the year, we gave annual increments to our associates and this is the predominant reason for our operating margin to drop by 180 bps over last quarter to 12.5%. Though the net impact of salary increases was 280 bps, we were able to contain the overall impact on the company at 180 bps, both due to volume growth and managing margin levers.

The quarter saw strong volume growth from both our verticals – N&CE and ENGG at 4.4% and 6.3% respectively. Our revenue mix from geographies – North America, Europe and APAC have remained stable. Out of the overall revenue growth of 6.4%, both our Top 5 and Top 10 customers grew by 5% and others grew by 8%. Though there was a decline in revenues from IEE, we saw good revenue growth from IEAI and IEG.

We continue to actively manage the various levers for improving operating margins – efficient onsite-offsite-offshore mix, right sizing the pyramid with induction of freshers and improving the productivity and utilization and we are confident of seeing positive results in the coming quarters.
Our PAT was lower this quarter due to higher tax rate on account of expiry of STPI benefits. We currently target to have 450 seats operational from October 2011 in our SEZ facilities at various locations. We are aggressively pursuing opportunities to generate more work out of our SEZ facilities.
Our liquidity position continues to be strong with a cash position of ` 393 crores.

This has been a quarter where we received a number of awards and recognitions – “Supplier of the year” award from Boeing; “Best Indian Company located in South India doing business in the USA” by Indo-American Chamber of Commerce; and “Exceptional contribution to the development of German-Indian Business relations” from Indo-German Chamber of Commerce, to name a few”

* New Business & Services Offerings –
o 7 customers added during the quarter, 4 in N&CE and 3 in ENGG.
o Key wins in Telecom, Utilities and Content Engineering
o Long term MSA signed with one of the global leaders in mining and construction equipment.
o Long-term MSA signed with a world leader providing lab analytical equipment
o Selected for providing ASIC design services for one of the largest manufacturer of semiconductors worldwide.
o Won a significant opportunity with the world’s leading aircraft systems OEM to design critical safety systems
* Awards and recognitions –
o Received “Supplier of the Year” award from Boeing in the “Non-production category”.
o Categorized as “Leader in verticals like Aerospace & Defense as well as Transportation” according to a recent study undertaken by Zinnov Management Consulting, a leading globalization and advisory firm.
o Recognised as “Best Indian Company located in South India doing business in the USA” by Indo-American Chamber of Commerce.
o Received award for “Exceptional contribution to the development of German-Indian Business relations” from Indo-German Chamber of Commerce, Dusseldorf, Germany.
o Signed MoU with Jawaharlal Nehru Technological University, Kakinada, A.P, to create the curriculum of M. Tech in Avionics.
* New facilities -
o Laid the foundation stone for our new facility at IT SEZ at Kakinada, A.P.
o We moved to a large and spacious delivery centre at Peoria, IL while we closed down our Seattle, WA office