Coforge Ltd

NIIT Tech ended yesterday, deep in the red, down over 11%. Obviously, the disappointing Q1FY15 numbers did not go down too well with the market. Despite a 7% (YoY) rise in consolidated revenue at Rs.578 crore, the company posted a 19% decline in net profit at Rs.43 crore.  Lower other income at Rs.4  crore v/s Rs.21 crore in the same quarter last year, on account of revaluation of current assets and liabilities due to rupee depreciation, has resulted in YoY decline in PAT.  Sequentially, the fall in sharper – net profit is down 30%. Operating Margins declined 171 bps to 13.4% primarily on account of wage increase during the quarter.

Operational performance apart, the company also has a setback in US wherein two clients in the BFSI segment scaled down their business and this impacted the overall growth of the company in the region. In terms of geographical growth, North America’s contribution to the revenue came down to 44% from 45% sequentially but better than 39% YoY. EMEA was down from 38% to 36% (QoQ) and RoW rose 20% from 17% (QoQ). In terms of segmental revenue, the largest contribution came from travel and transport at 39%, followed by insurance at 18%, BFSI at 16%, manufacturing at 7% and Govt at 6%.

Its executable order book for the next 12 months currently stands at $295 million, up from $263 million in previous Q1. Total employee count is at 8282, down from 8290 in Q4. Utilization has bettered from 77.3% to 78%. Attrition rate stands at 15.4% compared to 14.4% in Q4. FIIs hold a higher stake in the company than promoters at 35% v/s 31% of promoters.  The company expects growth to pick up from H2FY15.